Toyota has sent a further shockwave through Formula 1 by announcing it is quitting Formula 1 with immediate effect in an effort to cut costs across the company.

Citing the global economic downturn for its reason, the decision comes just days after Toyota completed one of its most successful seasons in Formula 1 by finishing fifth in the constructors' standings.

Although rumours that Toyota was considering pulling out of Formula 1 persisted throughout the season, the timing of the announcement remains a surprise, particularly as it had publicly stated it was chasing high-profile riders such as Kimi Raikkonen and Robert Kubica for 2010 in recent weeks.

Team manager John Howett had even stated that Kamui Kobayashi was almost certain to land a seat with Toyota in 2010 as recently as this week following his excellent performances in Brazil and Abu Dhabi.

However, with Toyota having already made decision to stop hosting the Japanese Grand Prix at its Fuji Speedway after just two seasons and Williams ending its engine contract early, the rumours never entirely went away.

Indeed, having revealed its first annual loss in seven decades back in March, the world's largest car maker has responded to the likelihood that it will announce even bigger losses for September by axing its F1 programme to try and reign in spending.

“TMC, which had viewed its participation in F1 as contributing to the prosperity of automotive culture, remained dedicated to competing at the pinnacle of motor sports, even in the face of the abrupt economic changes that started last year,” read a statement from the manufacturer. “However, when considering TMC's motor-sports activities next year and beyond from a comprehensive midterm viewpoint reflecting the current severe economic realities, TMC decided to withdraw from F1.

“TMC leaves F1 having compiled 13 podium and 87 point finishes over eight challenging seasons since 2002 with Panasonic Toyota Racing, a full-constructor team. It views its time in F1—in which teams put forth their best efforts to fiercely compete at racing's highest level—as an irreplaceable experience that provided an opportunity to develop both human resources and its R&D operations. TMC expresses its deepest appreciation to its F1 fans and others for their warm support.”

The Cologne-based Toyota team made its high-profile Formula 1 debut in 2002 with Mika Salo and Allan McNish at the wheel, but despite scoring in its first race, it initially struggled to make an impact, despite having a budget that was rumoured to be second only to Ferrari.