In order to tap the growing demand for smaller vehicles, Toyota Motor Corporation has launched a its first "minicar" in Japan - the Pixis Space.
Minivehicles - known as Kei-class vehicles - are defined under Japanese regulations as having maximum length of 3.4 meters (11.15 feet), width of 1.48 meters (4.86 feet), height of 2 meters (6.56 feet) and engine displacement of less than 660 cc.
In addition to the tax savings benefits they provide, minicars - which now make up about a third of Japan's annual vehicle sales - are also popular with individuals who only need a car for short commutes or grocery shopping, as well as with younger drivers who don't see cars as status symbols as the older generation do.
Toyota's new Pixis Space - basically a re-badged version of Daihatsu's boxy Move Conte - starts at 1.12 million yen ($14,700) with mileage of 25.5 km/liter (roughly 60 miles/gallon), the company said in a statement.
Besides the Pixis Space, Toyota is planning two more "Kei" models for the Japanese market, and is targeting annual minicar sales of 60,000 in Japan for all three models in total.
In light of the new Toyota minicar, rivals Honda Motor Co and Nissan Motor Co also plan to beef up their lineup of minivehicles, which Honda CEO Takanobu Ito has said could grow to half of Japan's market in the near future.