World’s smallest four-seater ‘Scion iQ’ debuts

  In San Francisco, a city known for cable cars, crusty sourdough and intense competition for curbside parking, a tiny car that’s a bit more than 10 feet long might sound perfect for commuters.

Toyota’s new Scion iQ will test whether Americans are ready to put aside more-is-more thinking in favor of a model that will be the second-shortest car sold in the U.S. market, after the Smart ForTwo.

Just as road monsters such as General Motors’ late Hummer and Ford’s yawning Excursion pushed the upper extremes of sport-utility mania, microcars such as the iQ and the Smart show how far at least some consumers will go for a low price, high gas mileage and two-to-a-space parking.

Smart was an 8-foot, 8-inch sensation when it rolled out in 2008, but sales have melted. Mercedes-Benz, whose parent Daimler makes the car in France, took back control of the U.S. operation this month, vowing to reinvigorate Smart’s dealer network and marketing.

But for Smart and now Scion iQ to get here the kind of acceptance the tiniest of cars have found in cities elsewhere in the world will be a challenge:

Americans “don’t really appreciate very small cars,” says David Champion, automotive director for Consumer Reports magazine. “What they appreciate is something that is inexpensive and has really good fuel economy.”

The iQ will start at $15,995 with shipping when it goes on sale in limited areas this fall. If Toyota’s estimate of 36 miles per gallon in city driving and 37 on the highway holds up with the Environmental Protection Agency, its official rating could be one of the highest on the road for a non-hybrid or electric vehicles.

To get the big fuel savings, though, motorists will have to embrace a car so tiny that it’s described by Toyota as a “3 plus 1″ — two relatively roomy seats up front and a cramped back seat for a third passenger, plus an almost non-existent fourth.

Parked in San Francisco’s busy Fisherman’s Wharf tourist district last week, a stubby iQ in “Hot Lava” orange drew stares but not necessarily raves from the kind of young people Toyota considers prime targets to drive one.

Kelsey Riley can’t see herself in the iQ. “I’m claustrophobic,” the 17-year-old from Modesto, Calif., explains. Besides, she says, “If you’re a girl like me, you need some place to put your luggage.”

But Viola Stoyan, 18, from Utica, N.Y., finds the sportiness and the space “pretty cool.”

Toyota’s original timing to show off its microcar for the U.S. market seemed ideal. The iQ made a splashy debut as a concept at the 2009 New York Auto Show, lowered from the ceiling in a haze of fog. Gas prices had peaked at an all-time high of $4.11. And the Smart was looking, well, smart.

Eager buyers had snapped up 24,622 Smart ForTwos in 2008 after it first went on sale that spring, according to Autodata.

Sales fell nearly 41% for the full year 2009 to 14,595, as the recession kicked in and gas prices came down some, but Toyota still saw opportunity. The Smart’s basic design was already nearly a decade-old. It had only two seats, not “3 plus 1.” Auto critics roundly derided its clunky electronically automated, clutchless manual transmission. And even though Daimler owned Chrysler Group at the time, Smart was distributed in the U.S. by Penske Automotive, also an auto dealer chain, with limited national marketing.

“Smart had a good concept, but the execution was not as good as they hoped,” says Scion chief Jack Hollis.

Meanwhile, Toyota had created a sort of Smart car 2.0 with its iQ, which it had been selling in other world markets since 2008. Billed as the “world’s smallest four-seater,” the iQ is little more than a foot longer than the Smart, but is as wide as some subcompact cars, which makes it feel more substantial on the road.

The iQ has a peppy 1.3-liter, 96-horsepower engine good for a top speed of 100 miles per hour. In contrast to the Smart’s gearbox, the iQ has a smooth, quiet continuously variable automatic transmission. Behind the wheel, the car feels much like any other small Toyota and is fun to drive. And it’s nimble, with its turning circle diameter of less than 26 feet.

“I was quite impressed with the way it drove, as opposed to the Smart, which is really quite atrocious,” says Consumer Report’s Champion.

In terms of packaging, the car tries to make use of every cubic inch, much as the Smart has done. The front passenger seat is positioned ahead of the driver’s seat to create more legroom for the backseater (the third in the “3 plus 1″). To maximize front legroom even more, there is no glove box, but instead a sliding plastic tray under the seat.

The car’s 8.5-gallon gas tank is positioned under the driver, instead of the car’s rear, which is common. Not only does the compact tank create more space for passengers, but Toyota says it’s better protected in case of a crash.

When it comes to safety, Toyota faces the same challenge of convincing wary buyers that a little car can hold up in a serious crash. Smart did it by touting its “safety cell,” a rugged steel box aided by air bags that protects occupants. For the iQ, Toyota is banking on promoting a cocoon of air bags, including the first rear air bag that lets Toyota bill the iQ as having more air bags — 11 air bags. — than any other car.

Practical considerations aside, Toyota is targeting “young urbans” for its “premium micro-subcompact,” Hollis says. That’s also the reason Toyota is , which is also behind Toyota selling it in the U.S. under its youth-oriented Scion brand. It’s aiming for hip, educated, fashion-forward, apartment-dwelling buyers who work on laptops by day and cruise clubs at night. In a city such as San Francisco, a 10-foot car can make a big lifestyle difference.

At San Francisco Toyota-Scion, a dealership here, shoppers commonly bring in the measurements of a garage or the parking space in front of their abode. “We have it happen almost daily,” general manager Mike Donnellancq says. “They’ll have it down to inches.” He predicts the iQ will be a hit.

To appeal to fashionistas, Toyota sees its primary competition as more than the Smart. It thinks they’ll shop the iQ against two other stylish small cars that aren’t quite short enough to be deemed micros — BMW’s Mini Cooper and the Fiat 500.

The danger of going the fashion route is that the car could catch on to the point of being a fad, then fade like one, which appears to have dogged Smart. With touches such as red stitching on the black leather steering wheel, the iQ aims to tug at heartstrings: “You have to have that emotional piece,” says Owen Peacock, Scion’s national marketing communication manager.

Because iQ has the potential to be seen as quirky and emotional, Scion officials think it could be the kick in the pants that the brand needs now to revive its patina of cool for the whole line. Scion is still the brand with the youngest average buyer age in the U.S., but its sales have fallen dramatically.

The brand became known for the original boxy xB wagon, which became a hit when it rolled out in 2003, despite being derided by some as looking like a rolling microwave oven. The brand also has a subcompact sedan, the xD, and just introduced a redesigned version of its sporty tC coupe. Sales of the three were a combined 26,621 for the first six months of the year, down 70% from Scion’s three models in the same period five years ago.

In addition to the iQ, Scion has a new sports car on the way, and Hollis thinks it will become the new symbol of the brand. Until then, the iQ will have to do its part to raise Scion’s profile.

“This car has the potential to be an icon like the xB was,” Hollis says.

Of course, Smart officials had pretty much the same lofty expectations for the ongoing success of their ForTwo, but for the first half of this year, sales are down to a paltry 2,556 cars.

Mercedes, now in direct control, plans to expand the dealer network from about 75 to 100. Mercedes spokeswoman Donna Boland says that will extend Smart’s reach into new or underserved markets, such as the northern suburbs of Chicago. The brand, she says, suffers from not enough potential buyers knowing about it.

“If we can get the awareness up and with the marketing muscle that Mercedes-Benz can bring, we think the (sales) volume will follow,” Boland says.

Back in San Francisco, Mike VanStory of McKinney, Texas, was hanging out with sons Ethan, 11, and Luke, 8, not far from the Golden Gate Bridge.

He thinks that beyond hip, young buyers, the Scion iQ might work as a second car for families. “People are really turning to smaller cars because of the price of gas,” he says.

Would he buy one? Maybe, he says, but he can’t forget the trouble his wife had wrestling a child seat into the back of the family’s Mini Cooper. Some cars, it turns out, can be too darned small.

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