(This version of the October 3rd story corrects the name of robotics group in paragraph 8)

TOKYO (Reuters) - Toyota Motor Corp on Monday unveiled a doe-eyed palm-sized robot, dubbed Kirobo Mini, designed as a synthetic baby companion in Japan, where plummeting birth rates have left many women childless.

Toyota’s non-automotive venture aims to tap a demographic trend that has put Japan at the forefront of aging among the world’s industrial nations, resulting in a population contraction unprecedented for a country not at war, or racked by famine or disease.

“He wobbles a bit, and this is meant to emulate a seated baby, which hasn’t fully developed the skills to balance itself,” said Fuminori Kataoka, Kirobo Mini’s chief design engineer. “This vulnerability is meant to invoke an emotional connection.”

Toyota plans to sell Kirobo Mini, which blinks its eyes and speaks with a baby-like high-pitched voice, for 39,800 yen ($392) in Japan next year. It also comes with a “cradle” that doubles as its baby seat designed to fit in car cup holders.

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The Toyota baby automaton joins a growing list of companion robots, such as the upcoming Jibo, designed by robotics experts at the Massachusetts Institute of Technology that resembles a swiveling lamp, and Paro, a robot baby seal marketed by Japanese company Intelligent System Co Ltd as a therapeutic machine to soothe elderly dementia sufferers. Around a quarter of Japan’s population is over 65 with a dearth of care workers putting a strain on social services.

Exacerbated by a reluctance to invite immigrants to bolster its working-age population, Japan’s demographic crunch shows little sign of easing, with the government looking at robots to replenish the thinning ranks of humans.

In the past half century births in Japan have halved to around a million a year, according to government statistics, with one in 10 women never marrying. Births out of wedlock are frowned upon in Japan and much less common than in Western developed nations.

Japan is already a leading user of industrial robots. It has the second-biggest concentration after South Korea with 314 machines per 100,000 employees, according to the International Federation of Robotics. New technology to help them better interact with humans means robots have begun moving beyond factory floors into homes, offices, shops and hospitals.

Kataoka said Toyota, which is investing heavily to develop artificial intelligence for self-driving cars, sees Kirobo Mini as a stepping stone to more advanced robots that will be able to recognize and react to human emotions.