Toyota Motor said Tuesday it would unveil a new compact hybrid car at the upcoming Tokyo Motor Show, boasting improved fuel efficiency amid intensifying competition to build more eco-friendly vehicles.

The "Aqua", to be sold under the name "Prius C" outside Japan, offers fuel efficiency of approximately 35 kilometres (22 miles) per litre, and will go on display at the motor show to be held between November 30 and December 11.

Its fuel economy exceeds that of Toyota's existing Prius model at 32.6 kilometres per litre, making it one of the world's most fuel efficient cars.

The Japanese auto giant plans to launch the five-seater model in late December in Japan, before a gradual global roll-out

The compact and lightweight hybrid system combines a 1.5-litre engine with a high-output electric motor.