Toyota to unveil new minicar brand for Japan

Toyota says that it will begin selling Daihatsu-supplied minicars late next year in the Japanese market.

In an effort to better compete in Japan's burgeoning minicar sector, the country's largest automaker says it will finally introduce a new brand aimed solely at the domestic market.

Toyota says it has inked a deal with Daihatsu, which will supply a trio of minicars beginning in 2011. Toyota, which is the only major automaker in Japan not to have its own minicar brand, owns 51 percent of Daihatsu.

Demand for minicars has increased dramatically in Japan thanks to tax incentives that favor the small cars, which feature engines displacing less than 660 cc. Toyota hopes to carve out a slice equal to about 60,000 units for its Daihatsu-supplied minicars.

Minicars currently compose about a third of Japan's overall new car market, but key industry players - like Honda CEO Takanobu Ito - say that the share could grow to as much as 50 percent in the near future.