Daihatsu Motors plans to launch small and compact cars in Brazil market as part of a broader strategy of expanding its collaboration with its parent company Toyota Motor in emerging markets worldwide.

Earlier this month it was reported that Daihatsu was also considering moving into the Thai and Indian markets by also collaborating with Toyota in targeting the small car market.

The collaboration is designed to reduce the cost of producing small cars and sharing production facilities between the two brands.

Collaboration between the two brands is most significant in Indonesia where Daihatsu produces most of the Toyota vehicles sold locally.

No details were available on the timing and the models to be produced in Brazil but Daihatsu's newly appointed CEO Soichiro Okudaira told reporters there was sufficient demand for subcompact and compact cars in Brazil.

Previously, Okudaira was chief engineer for the last two generations of the Toyota Corolla. He expects a joint model for Brazil to slot in below the Corolla, however.

The Brazilian vehicle market has declined by almost half over the last several years as the country's economic and political crisis continued to deepen.

Toyota sold 147,000 vehicles here last year, for a market share of just under 9%.