Toyota, the world's biggest car maker by sales volume, will supply the iQ -- built at a plant in Japan -- to the U.K. car maker. Aston Martin will redesign the car to sell it as the Cygnet under its own brand.
"Now is the right time for Aston Martin to take this first bold step to embark on this special project," Aston Martin Chief Executive Ulrich Bez said in a news release.
A spokeswoman at Aston Martin's Japanese unit said the company will sell the Cygnet in Europe and other countries, though details such as sales targets and launch dates have yet to be determined.
The deal comes as global auto makers introduce smaller, lower-emission cars to meet stricter emission regulations in markets world-wide, a big challenge for makers of large, gas-guzzling automobiles such as Aston Martin, whose cars have been featured in James Bond films.
The Japanese car maker is trying to rebound after posting its first net loss in almost six decades in the most recent fiscal year. The company's new president is the first member of the founding family to take up the post in 14 years.
For Toyota, the move could boost output volume and improve production efficiency for the iQ. Amid an economic slump, the car isn't selling as strongly in Japan and Europe as the company had initially hoped.
Partnering with the luxury-sports-car maker also could boost Toyota's brand image.