Toyota Motor Corporation and its fully owned subsidiary Daihatsu Motor Co., Ltd. has announced a plan to establish an internal company that will be responsible for compact vehicles for emerging markets, from product planning to production preparation. The companies said they will work toward establishing the internal company in January 2017.

The objective of the internal company is to develop and launch competitive compact vehicles ― based on Daihatsu’s approach to manufacturing affordable, high-quality products ― for emerging markets, in which the potential for growth is high, but in which competition is intensifying, according to the companies.

Daihatsu will be responsible for unified development, procurement and production preparation for compact vehicles for emerging markets based on “DNGA,” a Daihatsu vehicle architecture now being defined. Toyota will support these efforts by providing knowledge and resources, according to the companies.

Daihatsu is expected to take the lead in the internal company, which will bridge areas of both Daihatsu and Toyota, according to the companies.