Honda plans to double the proportion of minivehicle sales in Japan in five years, a Japanese business daily reported.

The move is expected to win customers replacing older vehicles in a shrinking domestic market, the Nikkei business daily said, according to Reuters.

Minivehicles have engines up to 660cc in size 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. Many were wrecked in the March earthquake and tsunami in north-eastern Japan.

Honda sold 160,000 minivehicles, or about 24% of a total of 650,000 vehicles in Japan last year. The company now aims to boost sales of minicars to 300,000 over the next five years, or 43% of the company’s projected overall sales of 700,000, the Nikkei said.

Honda is planning the December launch of a new wagon-type model that will get fuel economy of 25km per litre, likely making it one of the most fuel-efficient cars of its kind, the Nikkei said. Two more new minicars are set to be introduced in 2012, the report said.

A company spokesman told Reuters Honda could not confirm the details in the report.

The news agency noted Honda had announced plans last year to beef up its minivehicle operations and produce newly developed models at its Suzuka factory starting in 2012 instead of at subsidiary Yachiyo Industry. Chief executive Takanobu Ito said at the time he would not be surprised if minivehicles eventually made up 50% of the Japanese market.

Nissan Motor and Mitsubishi Motors said last May they would form a joint venture to develop minivehicles. Nissan currently has 660cc vehicles made under contract by both Mitsubishi Motors and Suzuki.

Toyota is due to enter the market within weeks with a Toyota-badged minivehicle made by its Daihatsu unit.