Daihatsu specialises in 660 cc vehicles and produces models including the Mira and the Cast, while also supplying car bodies and engines to Toyota and Fuji Heavy Industries Ltd (7270.T).
It competes fiercely with Suzuki Motor Corp (7269.T) in Japan, where both automakers each hold about 30 percent of the minivehicle market.
But as minivehicles sales slump at home due to a rapidly ageing society and a lack of interest in car ownership among young people, the automakers have been looking to expand further into overseas markets.
Daihatsu has a 16.2 percent market share of the passenger car market in Indonesia, where it manufactures the Ayla and other vehicles in a joint venture with Astra International. In Malaysia, it operates a joint venture which has a market share of around 32.5 percent.
It also exports to Europe and North America, where some of its models have been sold under Toyota's Scion brand targeted at the youth market.
Global sales for Daihatsu slid 13.3 percent in 2015, the weakest sales performance in the Toyota group last year, which also includes the Toyota and Lexus brands and truck maker Hino Motors Ltd (7205.T).
The announcement comes days after Toyota denied a media report that it is discussing possible tie-ups with Suzuki from a variety of angles, including cross-share holdings.