Published: Wednesday, 4 Nov 2009 | 3:35 AM ET

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Toyota Motor said on Wednesday it was pulling out of Formula One racing.

Toyota, the world's largest carmaker, was the last Japanese team left in the sport following Honda's withdrawal last December to cut costs amid a severe market downturn.

The world's largest carmaker will held a news conference at 8 am London time in Tokyo on Wednesday with company president Akio Toyoda and team principal Tadashi Yamashina also in attendance.

Toyota's withdrawal comes as the auto industry starts to stabilize following a sales crunch in the wake of the financial crisis.

Toyota's pullout is another major blow for Formula One after Japan's number two carmaker Honda quit the series last December to cut costs.

It would also continue the drain of Japanese companies from motor sport, which has seen Subaru and Suzuki withdraw from the world rallying championship and bike maker Kawasaki scrap its MotoGP team in the grip of a severe market downturn.

Japanese tiremaker Bridgestone announced on Monday they would not renew their supply contract with Formula One after the 2010 season.

Getty Images F1 Grand Prix of Brazil - Qualifying

In July, Toyota's Fuji International Speedway circuit gave up the hosting rights for the Japanese Grand Prix in 2010 and beyond to reduce costs amid the global economic downturn.

The pull-out of Japanese companies from F1 began with Honda-backed Super Aguri, who left for financial reasons early last year. Toyota are the only remaining Japanese team in F1, but have no drivers signed for next season and were dropped as Williams' engine partner for 2010.

Huge Budget

Toyota have failed to win a race since entering Formula One in 2002 despite an estimated annual budget of around $300 million.

Their departure from the sport leaves just three manufacturers — Ferrari (FIAT), Mercedes and Renault. It also opens the door for BMW-Sauber's new Swiss owners to take their place as the 13th team on the grid.

Toyota signed the concorde agreement earlier this year committing themselves to F1 until at least 2012, so the pullout may have legal ramifications.

The Yomiuri newspaper said Toyota had raised its global production plan for the year to March 2010 by 13 percent to about 7 million vehicles from 6.2 million units forecast in February.

Toyota has forecast an operating loss of 750 billion yen ($8.3 billion) on revenues of 16 trillion yen. It is scheduled to report second-quarter results on Thursday.

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