Toyota banks on tiny, green but pricier iQ model

TOYOTA, Japan — Toyota's new tiny car doesn't boast any state of the art hybrid or plug-in technology. But the iQ has plenty else packed into a diminutive frame that blends stylish curves with safety, fuel efficiency and smooth handling.

The iQ at less than 3 meters (9.8 feet) long is smaller than Toyota Motor Corp.'s Yaris subcompact. It is being shown as a Scion model, which targets younger buyers, at the New York International Auto Show, opening to the public April 10. It went on sale November in Japan, earlier this year in Europe, and is being considered for the U.S. market.

The boxlike yet curvy "premium four-seater" encapsulates Toyota's strategic ambitions to woo buyers of European models like German Daimler AG's Smart two-seater. It is also an attempt to engineer bigger profits from usually cheap small cars.

The iQ starts at 1.4 million yen ($14,000) in Japan, about 330,000 yen ($3,300) more than the Vitz subcompact — the Japanese market branding for the Yaris — and targets urban drivers who park and scoot around in tight spaces.

It fits three adults plus a child, dog or luggage, and gets 23 kilometers a liter, the equivalent of 54 miles per gallon. Overseas mileage numbers will vary. A Camry gets about 31 mpg, while the new Prius is billed to get 50 mpg.
"We've explored all the possibilities of smallness. With this car, making a U-turn gets to be a true joy," said Hiroki Nakajima, chief engineer for the iQ, which Toyota says evokes words like "individuality," "intelligence," "quality" and "cue."

The model seeks to debunk the preconception that big is good, he said.

"We've turned around the old-style hierarchy that comes with size," Nakajima told The Associated Press this week at Toyota headquarters.

Whether the iQ can live up to his hopes in a seriously stagnant global auto market remains unclear.

Battered by the credit crunch and fears about the economy, U.S. auto sales fell 37 percent last month from the same month a year ago. Japan sales dived 31 percent.
Languishing sales, combined with the strong yen that erodes overseas profits, are dragging Toyota into its first yearly loss since 1950 for the fiscal year ended March 31.

Nakajima says iQ sales are holding up on target, at about 3,600 in Europe in February, and nearly 1,800 in Japan the same month.

But Kaoru Kawakami, a Toyota dealer, was less optimistic, noting the Vitz was still the popular model, and overall sales at his showroom had plunged to half of what they were several years ago.

"Interest is high," he said of the iQ. "But it's really a tough market now."

At a Toyota-sponsored event to promote its cars in Okayama, southwestern Japan, Mami Shiroyama was a typical consumer, happy to look but not at all ready to buy.
"It's OK. It's a good car if you're driving alone," the 36-year-old restaurant worker said, after maneuvering the iQ through a course of cones set up to highlight its tight 3.9 meter (12.8 feet)-radius turn.

All that doesn't faze Nakajima a bit, who is confident time is on his side and that the iQ is exactly the kind of car people are going to snatch up — once the recovery comes.

Toyota says the iQ boasts the finest technology to "package" a car, referring to how the engine, fuel tank, gears and other parts fit in the car to make as much room as possible for passengers. That involved ingenious engineering, super-thin seat-backs and downsizing just about everything without adding costs, according to Toyota.

Among the innovations was engineering allowing the tires to be in front of the engine, expanding the distance between the front and back wheels, and creating more interior space.

The iQ doesn't compromise on safety and comes with nine air bags, including a rear window curtain shield air bag to protect back-seat passengers' heads during a rear-end collision.
But what's best about the iQ is its eye-catching design, inspired by curves and texture from nature, such as the conch-shell and the manta ray, making it stylish and fun, Nakajima said. That's why the iQ has as high "conquest rate," or winning over buyers who weren't Toyota owners, he said.

"In a sense, it's a very un-Toyota-like car," Nakajima bragged.

Yasuaki Iwamoto, auto analyst with Okasan Securities Co. in Tokyo, said the iQ was mainly designed for European emissions standards, and it may look too strange for the Japanese market, where cheaper staid models are big sellers.

"But the global shift in thinking toward ecological and smaller cars is irreversible," he said. "The iQ fits that trend."

Toyota Senior Managing Director Yoichiro Ichimaru believes more people are viewing cars as a tool for getting around, but ecology stands as an exception in drawing consumer interest, exemplified in models such as the Prius and iQ.

"Only cars that contribute to economic growth and the betterment of society can hope to succeed," he said.

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