Japan fifth largest car maker Mazda Motor will shut down its domestic plant producing commercial vehicles due to a slump in truck sales.

"The closure is mainly due to sluggish truck sales while we also want to put more resources into passenger car production," said a Mazda spokesman.

The move would help raise Mazda's overall domestic car production by 110,000 units, or 14%, to 898,000 units a year.

The company's oldest production line, in Fuchu, Hiroshima, western Japan will be shut and all 630 workers transfered to two other plants, one of which was mothballed in 2001 and now due reopen in 2004.

"We have decided to reopen the second plant due to steady demand for passenger cars in Europe and we want to increase our production capacity," the spokesman said.

Mazda's exports of commercial vehicles fell 54% in the year to August while domestic production fell 18.5%.

End of the road

Mazda has faced falling demand for its small trucks with payloads less than two tons.

Press Kogyo, Japan's largest maker of press parts for automobiles, will now produce small trucks from next year under Mazda's brand name due to the closure.

Mazda spent most of the 1990s in the red, but returned to profit last year after US auto giant Ford, which owns 33.3% of the company, spent six years restructuring the company.

Shares in Press Kogyo shot up 32% to 78 yen, after after the announcement while Mazda rose 0.37% to 268 yen.