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Autos News

Toyota mulls U.S. launch of IQ micro car

DETROIT (Reuters) - Toyota Motor Corp7203.T is considering bringing its IQ micro car to the U.S. market, the automaker's senior vice president of U.S. operations said on Wednesday.

“The Toyota IQ micro car being sold in Japan and Europe is another example of a world platform that we may to adapt to the U.S. market,” Don Esmond told an automotive conference.

The car is less than three-meters (2.7-yards) long and can carry up to four people. It is smaller than the automaker’s Yaris subcompact and is compared with the Smart car in size.

“The IQ can figure into Toyota’s response to another world mega-trend - urbanization,” he said, speaking at the Automotive News World Congress in Detroit.

Esmond also said he expected the U.S. auto market to be “very tough’ in the first half of 2009 while the second half will improve slightly.

Esmond said Toyota’s U.S. inventory is down to about 70 days, which the company still considers high.

Measured by the number of sales needed to clear inventory, Toyota’s unsold stock of vehicles had doubled from 45 days a year ago to near 90 days for some vehicles, before production was scaled back.

The Japanese automaker, which saw its U.S. sales fall 15 percent last year, said in early December it was cutting North American production of its best-selling cars, including the Camry and Corolla sedans, in response to rising inventories and a slump in sales.

The automaker also suspended work on its new plant in Mississippi, which was slated to produce the Prius hybrid car beginning in 2010.

Inventories have built up at Toyota, which is known for running a lean and cost-efficient production system where parts are delivered just in time to be installed in vehicles on the assembly line.

Reporting by Poornima Gupta; editing by Leslie Gevirtz

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