Europe's B-segment is reducing in size and fragmenting as new types of car are launched here, according to Toyota Motor Europe (TME) marketing development director Dave Cassell.

The B-segment in which cars such as the Japanese automaker's Yaris, Ford's Fiesta, GM Europe's Opel/Vauxhall Corsa, Renault's Clio and many others compete has fallen from a peak of 4.36m units in Europe in 2003 to 3.88m last year, TME data showed.

Speaking at the recent launch of new sporty versions of the Yaris, which was fully redesigned a year ago, Cassell said segment volume stabilised last year with the launch of redesigned models like the Clio, Peugeot 207, Fiat Punto, Corsa and Yaris.

"However, the B-segment is expected to decline in the future," he noted. "The cause of this decline can be found in the growth of the A- and B-MPV segments, which offer affordable vehicles well adapted to city driving." B-MPV models include the Ford Fusion, Opel/Vauxhall Meriva, Peugeot 1007 and Renault Modus.

He said the A, B and B-MPV vehicles last year accounted for 5.8m sales or 38% of the European market.

"Additionally, to comply with CO2 targets, small cars are more and more crucial to car manufacturers."

Cassell said the Yaris (sold as the Vitz in Japan, and previously badged Echo in some markets outside Europe) was Toyota's first European designed and built model at launch in 1999 and over 1.6m units have been sold so far, with growth almost every year.

Of the total, over 1m were built in Europe, at the purpose-built plant in Valenciennes, northern France.

Initial launch volume was 134,000 units in 1999 for a 3.3% segment share and the first generation peaked at 227,000 (5.4%) in 2004. After a dip to 217,000 (5.4%) in 2005, the launch of the redesigned range early last year boosted sales to 252,000 (6%) in 2006.

For 2007, Toyota is adding a range of sporty versions badged TS in Europe and SR in the UK. Most have the familiar 1.3 VVTi petrol and 1.4 D-4D diesel engines, but there is also a new top-line model offered with both three and five doors and a brand-new 133bhp 1.8-litre Dual VVT-I twin cam engine - with variable valve timing on both inlet and exhaust camshafts.

This new motor will also be available in the new Corolla-replacing UK-built Auris and is also going into a new Scion-brand hatchback sold in North America.

Rather than competing with top Clio and Fiesta models for Europe's 'hot hatch' buyers, predominantly young males in their 20s and 30s, Toyota is going after a wider age spread with its less overtly sporty 'warm hatch' SR line. The new 1.8-litre engine delivers a steady stream of torque across its entire speed range that is well suited to everyday driving and the 'sporty' body add-ons, LED tail lamps and shapelier seats are more discreet than in some rivals' hot hatches.

Upgraded equipment levels add luxury rather than sporting touches - there's no killer Pioneer stereo with subwoofer or bright red inserts in the upholstery though the front seats are better shaped to hold you in place on fast corners.

Although handling is a bit sharper than the regular models - badged Luna and Sol in Europe and T2, T3, etc. in the UK - it is still compliant and quite comfortable.

Toyota's UK arm is aiming the 1.8SR at warm-hatch rivals such as VW's Polo 1.6 Sport, Vauxhall Corsa 1.4Sxi, Renault Clio 1.6 Dynamique S and the Peugeot 207 1.6 Sport 120. Its GBP12,995 price tag for a three-door is at the top end but Toyota reckons the specification list, with such items as keyless entry and start and climate control air conditioning standard, makes up for the premium sticker.

In the UK, the top-spec SR is expected to account for just 7% of overall Yaris volume with typical customers described as "successful single people who appreciate the car's style and performance".

"Unlike its rivals, the Yaris SR1.8 is likely to attract an even balance of male and female customers and a number of older enthusiast drivers."

With just 12,000 sales, the new TS/SR models are expected to boost Europe-wide Yaris sales 7% to 270,000 units this year for a 5.9% slice of the B segment.

This comes on top of the boost the Aygo - Toyota's version of the city car built in a joint venture with PSA Peugeot-Citroen in the Czech Republic - has given the Japanese brand's overall small car sales in Europe.

In 2005, the Aygo's launch year, the baby of the range sold 23,000 on top of the Yaris' 216,000 for a total of 239,000. Last year's volume was 97,000 and 252,000 for a total of 349,000.

Cassell would not be drawn on this year's Aygo numbers but did say he expected Toyota's overall small car growth in Europe to continue rising in 2007 and beyond.

Graeme Roberts

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