Toyota today launched its first minicar for the home market in Japan -- the Pixis Space.

Such tiny cars -- known as Kei-class vehicles -- have become increasingly popular in Japan and now generate about a third of all new car sales there, the Associated Press reported from Tokyo.

Toyota's Pixis Space is basically a rebadged "Move Conte" from Toyota-owned Dahaitsu Motor, which specializes in small vehicles. Starting price 1.12 million yen ($14,700).

Kei vehicles -- which qualify for lower taxes -- are defined under Japanese regulations being a maximum of 11.15 feet long, 4.86 feet wide and 6.56 feet high and with an engine smaller than 660 cc.

The Pixis may be tiny-- the wheelbase is just 8.2 feet. But it offers a full range of options: six trim levels and a 660cc engine and CVT powertrain with start-stop that can be had with a turbo and with front- or all-wheel drive.

Toyota plans two more minicars for the Japanese market, believed to be a tiny van and a micro-truck, although it has not said when those will launch. Its goal is total annual sales of 60,000 in Japan for the three.

Minicars are popular not only for the tax savings but also with people who use cars for short commutes or grocery shopping, as well as with younger people who don't see cars as status symbols as did the older generation.

They are also easy to handle on Japan's crowded streets, and some come in cute designs and colors -- Toyota photo above is a case in point -- that appeal to Japanese consumers.

The entrance of Toyota, the elephant of the Japanese market, into the segment is expected to heat up the competition in Japan. It might also give Toyota additional products for some emerging markets.

Nissan, Japan's No. 2 automaker, has a deal with Mitsubishi for Mitsubishi to make minicars for Nissan.

Honda already sells several minicar models in Japan and sold 160,000 total last year, about a quarter of its sales in Japan.