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A new city SUV to sit below the Toyota RAV4 appears to be high on the Japanese company’s to-do list.

Development of city-sized SUVs is currently booming. A number of new sub-compact soft-roaders having gone on sale in current months, including the Holden Trax, Peugeot 2008, Ford EcoSport and Nissan Juke. And now, it seems, Toyota is set to enter the battle.

Toyota Australia product planning manager Mark Dobson told CarAdvice that the blossoming sub-compact SUV segment  cannot be ignored.

“Everybody needs to be there,” he said. “It’s a market for all players. And Toyota is interested in any market that is growing.”

The company has looked at research on current and future trends of the wants and needs of buyers, and the common themes are low fuel use, high safety, compact dimensions and lifestyle status. Dobson says a sub-RAV4 model could fit that criteria.

“That’s what customers are saying,” he said. “That’s the car they want to buy. Those types of cars were seen to satisfy those trends.”

Toyota sub-brand Daihatsu previously sold the first-generation Terios compact SUV in Australia, and the second-generation model would have appeared to fit the bill for most buyers.

“From a size point of view it was probably the right car,” Dobson said, though that car has been in production since 2006. Looking at that brand’s product lifecycles, a replacement could be seen within 12 months.

In Indonesia the brand sold a unique version of the current-generation Terios, which was badged Toyota Rush.

Toyota already offers an alternative to the RAV4 SUV and Corolla small cars with its Rukus boxy hatch. However, that model is a size above a potential sub-compact high-rider, and with prices starting from $27,990 it is positioned too high up the dollar-meter to fight against the circa-$22k city SUV crowd.