Toyota Motor and its minivehicle unit Daihatsu Motor have unveiled their first car jointly developed for Japan and said they also would aim to cooperate in India and other emerging markets.

According to Reuters, the world’s second-biggest carmaker and Japan’s second-biggest minivehicle maker began selling their first jointly developed car this year in Indonesia, but this would be their first in the competitive domestic market.

The one-litre compact car, called the Toyota Passo and Daihatsu Boon, was aimed at expanding sales in the segment where minivehicles and compact cars overlap, the companies reportedly said – it would be Toyota’s smallest model and a high-end car for Daihatsu.

“The compact and minivehicle markets are growing rapidly and together account for more than 40% of new car sales in Japan,” Toyota president Fujio Cho told a joint news conference, according to Reuters.

“This new car combines Toyota’s strength in development technology and quality control with Daihatsu’s know-how in small-car development,” he reportedly said.

According to Reuters, Cho said the two companies would aim to meet demand for high-performance small cars in China, India, South America and eastern Europe through similar cooperation, though he added that no concrete plans had been drawn up.

Daihatsu would eventually consider exporting and producing the model overseas, President Takaya Yamada said, according to the report.

Company officials reportedly said that, at 49.4 mpg, the model’s fuel efficiency is in the top range, even including 660 cc minivehicles, and cabin space is the largest in its class.

“We’ve been losing about 4,000 units of sales a month in the minivehicle market to compact cars, and only a few percent of that flows to our own brand,” Daihatsu’s Yamada said, according to Reuters, adding, jokingly: “We wanted to guard our sales and maybe even steal sales away from Toyota’s Vitz (Yaris/Echo subcompact).”

The report said the monthly sales targets are 7,000 units for the Passo and 1,500 units for the Boon and both cars, to be built by Daihatsu, start at the equivalent of $US8,122 before taxes.