Toyota measures its iQ

A bigger engine for the tiny Toyota iQ will not make or break the decision to bring the city car to Australia. But the baby runabout could soon be on local streets, if a current feasibility study by Toyota Australia gives it the green light.

In Europe this week, Toyota announced a 1.3-litre four-cylinder engine would be added to the iQ line-up which, until now, had only been powered by a 1.0-litre three-cylinder or a 1.4-litre turbodiesel. But a senior Toyota executive has told the Carsales Network that the iQ could well make it Down Under with the regular 1.0-litre petrol engine that's been available all along.

Toyota Australia bosses have been on the record as saying they are keen to import the iQ if it can be sold at the right price and there is a business case to support it.

There was a feeling that the 1.0-litre engine may have been a bit breathless for Australian tastes and that the 1.3 could be the engine that seals the deal. But not so, says our well-placed source.

"The iQ is a niche vehicle with a niche purpose," says the insider. "A 1.0-litre engine is more than enough for a car of that size and weight, a 1.3 would turn it into the proverbial rocketship."

He also added that the 1.0-litre three-cylinder has won numerous awards, including the Engine of the Year award for its category.

The iQ is intended to be a rival to the Mercedes-Benz-built Smart ForTwo. It is slightly longer (2.9m compared with 2.7m) than the Smart car but can seat three occupants comfortably and four at a squeeze. The Smart can carry only two.

"We need to assess whether it's relevant to our market and interests buyers," the insider said. "We are definitely looking at it. We are definitely interested but no decision has yet been taken."

Despite being a hit in Europe, the Smart car has been slow to gain acceptance in Australia.

An all-new model, released 18 months ago, brought with it a slightly bigger interior than the original, as well as better safety and road holding.

At issue is the Smart's premium price, which starts at $19,990 and stretches beyond $24,990, putting a car smaller than a Toyota Yaris in the same price bracket as a car as big as a Toyota Corolla.

Toyota Australia, is wrestling with the same question: how many buyers are prepared to pay a premium for convenience -- and a smaller car?

"It won't be a China-beater that's for sure," says the Toyota insider, referring to the wave of cheap Chinese cars around the corner.

"This is a car with a very niche appeal, but as our cities become more congested cars like the iQ could become more appealing over time."

Toyota says its vehicle is dearer to build than the Smart because it has more seats, and more equipment. The Smart ForTwo has four airbags and a four-star safety rating according to Euro NCAP, whereas the Toyota iQ has nine airbags and a five-star safety rating.

Read the latest Carsales Network news and reviews on your mobile, iPhone or PDA at www.carsales.mobi.