The battle between Toyota and Honda for supremacy in the hybrid petrol-electric car market is set to heat up with both Japanese carmakers set to introduce distinctive new models early next year.

Honda disclosed details on Wednesday of a hybrid hatchback that will be smaller and cheaper than its existing Civic hybrid sedan.

Toyota is due to unveil a larger version of its popular Prius. It has so far kept a low profile on the new model to avoid damping sales of the existing Prius.