Scion iQ entering uncertain market as Smart ForTwo sales decline

Daimler AG can’t be incredibly happy about the sales performance of the Smart ForTwo recently, especially because the number sold this year will likely dip below last year’s numbers. That makes the playing field interesting for Toyota who is planning on debuting the Scion iQ in early 2011, which is another microcar with a couple of twists.

One of the biggest differences is passenger seats. The Scion iQ comes with seating for 4 people inside the cabin, which may make it more marketable for people who want a little more flexibility than the Smart ForTwo’s 2 person limit. The second generation of the Smart ForTwo came out in 2007 and dealers are wanting more flexibility in customization plus a model for more passengers. Daimler is expected to deliver a facelift still in 2010 but it remains to be seen if that can reverse the downward trend.

So while Daimler is struggling to keep the Smart ForTwo popular, Toyota is hoping to capture part of the microcar market with the Scion iQ and claims that it will provide a number of customizations consistent with the Scion brand. It sounds like room for more passengers and a strong focus on individuality would position the iQ for success but the segment of drivers interested in microcars is still relatively unknown.

It varies by market, but in the United States, “sales of the ForTwo are down nearly 70 percent to below 4,000 in the first seven months [of 2010]. July sales were 560, down 60.5 percent compared with July 2009,” via Automotive News Group. So even if Toyota were to take a large slice of that business, it isn’t significant.

Instead, marketing the Scion iQ to other drivers will be critical – and emphasizing individuality certainly helps. It also has traits that may appeal to the younger crowd like an in-dash screen that folds downward and displays a morphing light scene when not in use, almost like something at a club.

From an economic perspective, the Scion iQ is expected to perform at the high 30 mpg range, which is easy on the wallet and the Earth.