Toyota has committed to selling a minicar in Europe even as rivals such as Ford and Opel have exited the segment because of low profits.
The company will build a successor to the Aygo to continue the model's role "as an affordable entry point to the Toyota brand," the automaker said in a statement.
The Aygo successor will be sold with a combustion engine and is not expected to get a full-electric version, even though rivals are targeting the segment with battery-powered cars such as the Fiat New 500 and Renault Twingo Z.E.
"The A- (minicar-) segment is heavily dominated by products featuring internal combustion engines, illustrating that budget is a key consideration – and the market outlook sees this strong mix continuing, especially for customers where financial accessibility is a dominant factor," Toyota said in its statement.
The replacement for the Aygo will be based on the same GA-B platform as the Yaris small car and upcoming Yaris Cross small SUV, helping to reduce costs by pushing expected annual sales of GA-B platform cars to more than 500,000 in Europe, Toyota said.