Toyota is to build a city car for Aston Martin on its iQ platform, the underpinnings of the industry’s smallest four seat car and an all-electric model the Japanese automaker is expected to launch in the next two years.

“The iQ-based model will serve as the basis for a new luxury commuter car to be exclusively built for and sold to Aston Martin owners,” Toyota Motor Europe (TME) announced on Monday. The new ‘Cygnet’ “would pair Aston Martin’s trademark design flair with the iQ’s “highly compact and low-CO2 city driving package”, the automaker said.

It would “be tailored specifically to customer requirements” at Aston Martin’s global headquarters in Gaydon, here in the UK.

“Now is the right time for Aston Martin to take this first bold step to embark on this special project – made possible with the support of an organisation of Toyota’s stature and capability and the intelligent design and perfect city car package of the iQ,” Aston Martin chief executive Ulrich Bez said in a statement.

“Much work is still required, but I am confident that this project could become reality in the not too distant future. This concept – akin to an exclusive tender to a luxury yacht – will allow us to apply Aston Martin design language, craftsmanship and brand values to a completely new segment of the market.

“The offering of a ‘Cygnet’ with a DBS, DB9 or Vantage is a unique combination of opposites and a novel transport solution allowing intelligent and sensitive mobility on an exclusive and innovative level.”

“It’s a great compliment that the Toyota iQ has been hand-picked by one of the world’s most prestigious sports car brands, a company with whom we also share a strong friendship. This collaboration represents a natural pairing of strategies: a small yet spacious package, perfect for the city driver, finished off with Aston Martin’s iconic design language,” said TME president and CEO Tadashi Arashima in a statement.

“The Cygnet is a good choice for the Aston Martin owner looking for that second or third car, which is luxurious and eco-conscious,” he added.

Toyota executives in Japan earlier this month hinted that the iQ platform would soon spawn more new models but would not be drawn on specifics.

One told just-auto Toyota had considered launching the iQ – which is positioned as a well-equipped ‘luxury’ city car, rather than an entry-level base model like the Czech-built Aygo –  as a Lexus and would not rule out the launch of a Lexus brand variant in the future. And, with the launch of the rival Smart (two-seater) line in the US, there is scope for Toyota to develop a Scion variant, as well.

For now, Toyota said on Monday it would launch a sporty, limited edition iQ in Japan customised by Gazoo Racing, a racing team featured on the Toyota-operated marketing website

Akio Toyoda, who took over as president last week, has been a member of the Gazoo Racing team for the past few years and has said he would aim to develop cars that are more fun to drive.

Toyota insiders have said their new chief is known for his enjoyment of driving and considerable skill on a track.

Though less than 3m long, the iQ can pack up to four people into its flexible cabin (rear seats fold for a two-seater plus luggage; load space is negligible with all four seats in use) and was considered a breakthrough in intelligent design when launched, though it has been criticised here in Britain for its high prices (GBP9,495-GBP11,495; $US15,700-$19,000).

Design innovations include a flat under-floor fuel tank, and a super-compact air conditioner unit (from Denso) allowing a shallow asymmetric dashboard. With its one- and newly-launched 1.3-litre petrol engine choices, ‘official’ EU CO2 emissions are as low as 99g/km which means UK owners do not have to pay any annual road tax. High levels of passive and active safety equipment resulted in the top Euro NCAP 5-star rating, too.

Toyota launched the iQ in Europe last January and has sold over 25,000 units to date.

“The planned collaboration with Aston Martin is a timely endorsement of the iQ’s superior packaging,” TME said.

“The announcement marks a critical step in Toyota’s longer-term planning to expand the ‘iQ world’ – that is, to bring new versions of the [model] to market globally and expand the company’s eco-friendly line-up.”