Toyota thinks small

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What to do when the car market gets smaller? Build smaller cars.

At least that’s what Toyota apparently has in mind as it tries to weather the global downturn in auto sales. According to the Associated Press, the Japanese automaker may bring its iQ ultra-compact car to the U.S. market, where it would vie for leadership in the fuel economy rankings and pose a challenge to Daimler’s Smart Fortwo two-seater.

“The Toyota iQ microcar being sold in Japan and Europe is another example of the world platform that we may want to adapt to the U.S. market,” Don Esmond, a senior VP at Toyota’s Torrance-based U.S. sales operation, told an industry conference in Detroit this week.

Esmond didn’t specify when the iQ, which went on sale in Japan and Europe last year, might be available in America.

Toyota refers to the two-door car, which the automaker says can seat three adults and a child, as an “urban commuter vehicle.’ At around 10 feet long, the iQ is about a foot longer than the Smart Fortwo, which is a shade under 9 feet in length, and it’s about 4 feet shorter than a Toyota Yaris.

But for MPG-conscious consumers, the most important number will be the one on the EPA sticker. Under Japanese standards, the car is rated at 54.1 miles per gallon. If it achieves similar results under the EPA’s fuel economy standards, the iQ would get the best mileage of any car sold in America by a major manufacturer, including Toyota’s own Prius gasoline-electric hybrid. (The 2009 Smart Fortwo coupe has a combined city/highway EPA rating of 36 MPG.)

Daimler sold just under 25,000 Smart Fortwos in the U.S. last year, the first year it was widely available here. That was about the same number of Beetles sold by Volkswagen.

Rebecca Lindland, an analyst with IHS Global Insight, told AP that microcars appeal to some buyers but can be a tough sell to most American motorists.

“There’s a novelty aspect to these vehicles, and as long as the manufacturer understands that they’re going to get novelty car volumes, then fine,” she said.

-- Martin Zimmerman