TOKYO -- Toyota Motor Corp. will rely on its small-car partner Daihatsu to tackle a big problem.
Emerging markets are seen as the key to long-term growth for the auto industry. But Toyota and other Japanese automakers largely trail their global rivals there.
In a plan unveiled last week, Toyota will create a venture in which Daihatsu will develop low-cost vehicles for Toyota as it tries to deepen its roots in India, Latin America, Africa and beyond. Toyota will tap Daihatsu's expertise in low-cost manufacturing of compact vehicles and parlay that into more competitive cars for those markets.
Toyota acquired full ownership of Daihatsu this year, and the two are planning the new small-car venture. The new company will form in January, Toyota said.
The two will cooperate on product and business plans, base cars on Daihatsu's vehicle architecture and share their factory footprints.
"Toyota intends to learn the very fundamentals of Daihatsu's competitiveness and change the way we work," Toyota Executive Vice President Shigeki Terashi said.
The move comes as Toyota and other Japanese automakers shift more focus to emerging markets, as economies in such markets as Brazil and Russia slow down.
Daihatsu is strong in some Southeast Asian countries, but Toyota largely trails global rivals in Latin America and India.
Excluding China, emerging market vehicle sales are expected to climb to 30 million vehicles in 2023, from an expected 19 million this year, IHS Automotive forecast earlier this year. Annual vehicle sales in mature markets will fall to 43 million from 44 million over the same period, IHS said.
Toyota's move comes as the company forms a new structure introduced in April. The Daihatsu venture will operate outside that structure, Toyota and Daihatsu said.
A Toyota spokesman said the partners have not decided who will lead the new company, how much investment might be needed or when it might launch a vehicle.