Toyota Motor toy will pay $311 million to raise its stake in Subaru parent Fuji Heavy Industries to 16.5%, and the two companies said Thursday that they will develop cars together.
Fuji and Toyota will develop a compact, rear-wheel drive sports car, to go on sale by the end of 2011.
Toyota, which makes the Prius gas-electric hybrid and Camry sedans, will handle the basic design, while Fuji will develop the engine, they said without giving further details. Fuji already makes the Camry at its U.S. plant.