Nissan (7201.T) will furlough around 10% or 800 employees at its UK plant in Sunderland as a global shortage of semiconductor chips slows production.
The Japanese carmaker will ask the workers affected to remain on furlough until the chip shortage lets up and production can be increased, the Nikkei first reported.
The company also announced it is planning to halt production at some of its factories in Japan from next month.
Other carmakers have made similar moves. Earlier this week, US car company Ford (F) announced that it will cut car production due to the global chip shortage.
Global car companies have been struggling with semiconductor shortages due to increased demand in other markets such as smartphones and other consumer electronics amid the COVID pandemic.
On Friday, the world's largest chipmaker, Taiwan Semiconductor Manufacturing (TSM) dampened any hopes of the issues letting up soon, saying that the shortage could continue into 2022.
Yahoo Finance has approached Nissan for comment.
The car industry has also been further hit by the coronavirus pandemic which resulted in production suspensions, lower sales, reduced profits and job losses.
According to data released by the Society of Motor Manufacturers and Traders (SMMT) the number of cars built in the UK fell for the 18th month in a row in February.
The figures showed that production was down 14% compared with the same month a year ago, with just 105,008 cars leaving factory gates - the weakest February for a decade.
Last week, Vauxhall said it will stop producing its Astra model at Ellesmere Port in Cheshire and close the plant completely in April next year unless it gets government support.
The factory employs almost 1,000 people on site and supports 6,000 jobs in its supply chain.
Vauxhall's parent company is seeking incentives from the UK government in order to keep the plant and the jobs in place.
Other versions of Astra are built in Gliwice, Poland, and are expected to stop production at the end of 2021.
The firm asked for government support to keep the plant open. The company was also reportedly seeking incentives to make fully electric cars.
In March, Japanese car firm Honda agreed to sell its manufacturing plant in Swindon to a European logistics company, bidding farewell to the city after 36 years.
The automaker had been building 160,000 Honda Civics at the plant — its only car factory in the EU. The move could see 3,500 jobs go once the final Civic hatchback rolls off the production line.
WATCH: Global carmakers hit the brakes on chip shortage