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Toyota unveiled a European-designed concept car that could be the basis for a baby Prius at the Detroit motor show.
The FT-CH is a hybrid five-door four-seater that would be lighter, even more fuel-efficient and cheaper than the current Prius hatchback.
Toyota's head of American sales, Jim Lentz, said: 'Our dealers and customers have been asking for a car like this.'
Lentz admitted that Toyota is developing a Prius family. 'Naturally, this requires additional models and the FT-CH is definitely a concept that we are considering among others,' he said.
Almost two feet shorter than a Prius
The FT-CH is 22 inches shorter than a Prius, but only six inches smaller in wheelbase, while the cabin is said to be only half an inch narrower.
Lentz began the FT-CH presentation by asking his audience to imagine a world where every single car disappeared overnight, leaving people with no means of getting to work, taking their children to school or carrying out their daily business.
'No other product does so much for us (as the car),' he said, 'so we need to figure out a way of living with it.'
A million hybrids a year
Lentz said hybrids would soon become Toyota's 'core powertrain'. The company aims to be selling a million a year before long and plans to develop another eight including the Auris hybrid to be built in the UK. This total does not include the next generation of existing models.
Alongside hybrids, Toyota is looking at hydrogen fuel cell vehicles, which it has committed to begin producing in small numbers by 2015, and battery electric vehicles.
Lentz claims Toyota has made 'great strides in cost reduction' with fuel cells, and that the issues over the range of electric vehicles and the recharging infrastructure to support them are 'hurdles that will be cleared'.