Toyota together with its fully-owned subsidiary Daihatsu has announced that it will officially establish an internal company responsible for developing compact vehicles for emerging markets on January 1, 2017. The new internal company will be called the ‘Emerging-market Compact Car Company’.

Daihatsu president Masanori Mitsui will assume the role of chairman, while Toyota managing officer Shinya Kotera is to be appointed president of the new internal company.

According to a press statement, the company will develop compact cars specifically for developing countries, leveraging on Daihatsu’s expertise of producing quality and affordable products, and remaining “untethered by conventional practices and rules.”

The internal company will consist of three divisions – the Emerging-market Compact Car Product and Business Planning, the Emerging-market Compact Car Product Planning and the Emerging-market Compact Car Quality Planning.

The former spans both Toyota and Daihatsu, and will conduct overall planning for products and business operations, including proposing a Toyota-brand vehicle product line-up for emerging markets, as well as overall strategy.

The company also stated that Daihatsu will be largely responsible for product development, with the internal company’s product planning and quality planning divisions being responsible for final product development and quality for Toyota-brand vehicles.

Aside from the formation of the internal company, Toyota Motor Asia Pacific Engineering and Manufacturing (TMAP-EM) will be renamed to Toyota Daihatsu Engineering and Manufacturing (TDEM), and become an entity under the new internal company.

TMAP-EM’s previous duties of providing Toyota development, logistics and production preparation support for locally produced vehicle models, will not be extended to support the production of Daihatsu-centered compact vehicles for emerging markets as TDEM.