Toyota is planning to bring a new ultra-compact car to Europe by 2009 to help meet growing demand for small cars and stricter emissions requirements.

According to the Japanese news agency Nikkei, the car would be based on the iQ concept shown at the Frankfurt show earlier this month.

The iQ is 80cm shorter than the Yaris at 2.98m. The new car would seat four people and be offered with a small petrol or diesel engine.

According to Nikkei, the car would be produced in Japan at a rate of around 100,000 units a year. It could also be sold 'at home' in Japan.

Toyota's chairman Fujio Cho confirmed in August that Toyota is planning to launch a new small low-cost car in India for launch in 2009. That car would be built there at a rate of 100,000 units a year, but he told Reuters at the time that the car would also be built in other plants around the world, possibly also in Brazil.

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