Vying for a bigger share of the increasingly competitive market of compact cars and minivehicles, Toyota Motor Corp. and its subsidiary Daihatsu Motor Co. on Monday launched a jointly developed compact car.

"Both the compact car market and minivehicle market are expanding, accounting for more than 40 percent of the overall (domestic) market for new vehicles," Toyota President Fujio Cho told a news conference.

Both companies target compact car and minivehicle users, he said.

Toyota contributed to design and development, while minivehicle maker Daihatsu provided production technology, company officials said. It is the first time the two carmakers have released a jointly developed car for the domestic market.

The Passo is available nationwide through Toyota Corolla dealers. Daihatsu will sell it under its Boon brand through the nationwide Daihatsu dealer group.

They said the model features a spacious interior that is the largest in its class for vehicles of similar engine displacement.

It comes with a 1-liter or 1.3-liter engine and is priced between 945,000 yen and 1.302 million yen, including consumption tax.

It is the smallest compact car for Toyota. It is also the first time in four years for Daihatsu to launch a vehicle outside the minivehicle market, they said.

Toyota said it hopes to attract more minivehicle users. Daihatsu said it aims to hold onto its minivehicle users, who tend to switch to other makers' compact cars when making their next purchase.

Toyota's monthly sales target is 7,000 vehicles, and Daihatsu's is 1,500.