Toyota will export small hybrid cars it plans to build from the end of this year at the Kanto Auto Works plant in Iwate Prefecture to North America, a report said.

The unnamed sources told Kyodo News the company plans a top price of JPY2m, cheaper than its currrent Prius hybrids, so that exports can withstand the competitive disadvantage stemming from the strong yen.

The carmaker aims to meet its annual domestic production target of at least 3m Toyota and Lexus brand vehicles by selling the new hybrids to North America, they added.

The small hybrid will have a 1.5-litre engine and be designed to run more than 40km (25 miles) per litre of petrol. That’s well over 100mpg.

Production of the fuel-efficient vehicle in Kanegasaki, Iwate, is in line with the plan Toyota unveiled earlier to make the northeastern region in and around the prefecture, called Tohoku, its third major domestic manufacturing base after the Chubu region, which surrounds Nagoya, and Kyushu in southwestern Japan.

The company has also said it wants to help rebuild Tohoku, which was hit hard by the March earthquake and tsunami, through the production of the new hybrids.