Toyota Motor Corp (7203.T) said it would enter the growing Japanese minivehicle sector next year through a supply deal with unit Daihatsu Motor Co (7262.T) in a move set to intensify competition in the tough domestic market.
Under the deal announced on Tuesday, Daihatsu would supply three minivehicle models to its parent in stages starting in the fall of 2011. Total sales are expected to be around 60,000 units a year once all three models are on the market, they said.
Minivehicles have engine displacements of up to 660cc and are unique to Japan, making up one-third of new vehicle sales thanks to preferential tax treatment. They are especially popular in rural areas as a second or third family car.
"The weight of minivehicles in the market has increased, and there were a growing number of our own customers who were shifting to that segment," Toyota Executive Vice President Yoichiro Ichimaru told a joint news conference.
"Our focus will remain on the non-mini segment, but this way we will be able to meet the needs of such customers," he added.
Toyota is the only Japanese car maker that does not currently have a minivehicle brand.
Daihatsu President Koichi Ina said the deal would boost its production volume while bringing even more attention to the minivehicle segment.
Daihatsu and its 51 percent owner, Toyota, cooperate broadly, including sharing manufacturing facilities and vehicle platforms.
