Subaru is leveraging its new relationship with Toyota to revive its Justy small car programme in Europe and is mulling the launch of an electric K-car over here.

Subaru originally made the Justy itself and then switched to rebadged variants of the Suzuki Swift built at the Magyar plant in Hungary. That arrangement ended several years ago.

Later this year, Subaru dealers will start selling a new Justy based on the Daihatsu Sirion city car.

Both Daihatsu and Subaru are now effectively part of the Toyota group after Toyota bought out General Motors's stake in Subaru. Already Subaru's US factory has started building the Toyota Camry and now a 'Subaruised' Sirion will give Subaru a much-needed entry-level model in the UK and Europe.

The Justy will be restyled with a Subaru 'face' but will essentially be the same mechanically as the Daihatsu.

Subaru is also considering a more radical small car - the R1E, an all-electric version of the Japanese market R1 'Kei-car'. This small, three-door model has a range of around 80 miles and a very fast charging facility - it can be recharged in just 15 minutes, according to Subaru.

It's already in production and 30 cars are being used in an experimental EV scheme in Tokyo.

As a genuine zero-emissions vehicle it would be exempt from the UK's London congestion charge and would address Subaru's problem of having few low carbon emissions vehicles in its range.

It would be sold as a more expensive car than the Sirion-based Justy.

The new move means three brands will be offering versions of the Sirion in the UK and Europe: Daihatsu, Subaru and Perodua, whose Myvi is a Malaysian-built Sirion.

Here in the UK, IM Group imports both Daihatsu and Subaru and many of their dual-franchise dealers will soon be able to offer customers a choice of Subaru or Daihatsu versions of the small car.