The company, which is named the “Emerging-market Compact Car Company”, will only be internal, meaning that the two brands will not be spinning off a separate budget brand like Dacia is to Renault, but will instead produce a range of small, cheaper cars under the Daihatsu brand.
As the name suggests, the brand will deal with emerging Asian markets such as Indonesia and Thailand, while Toyota’s operations across mature markets such as the UK, USA and Japan will remain as they are. Wider emerging markets across the world will not be targeted by the move.
A Toyota spokesman confirmed that no new badge would be created from the deal, but the two companies would pool knowledge on small cars. He added that Daihatsu’s models would benefit from Toyota's global TNGA platform. The first new cars to be made under the scheme will emerge within a few years.