A car that is small, environmentally friendly, boasts a cleverly designed interior, funky lines and yet is also reasonably spacious inside? No, Toyota doesn’t want to be left outside the party that is already going on with the likes of Fiat and VW.

Toyota describes its Toyota iQ concept, unveiled today at the Frankfurt Motor Show, as a car that ‘marks a step change in small car design, challenging conventional thinking by being small, yet spacious and high in premium quality features.’

The iQ concept was created at ED2, Toyota’s European design studio in the South of France, following the principles of Toyota’s ‘vibrant clarity’ design philosophy – forward-looking, intelligent and energetic, with clarity of purpose and function.

Wahei Hirai, Manager of Toyota Motor Corporation’s design activities, explained: “The iQ concept is designed to reflect and enhance the lifestyle of its owners. In an urban environment, people want to express themselves through dynamic and on-the-edge design, but at the same time rational factors such as size, functionality and CO2 emissions cannot be ignored.

“Bringing these contradictory aims together in synergy was critical to the iQ concept, it’s a way of thinking we call the ‘J-factor’, a philosophy at the heart of all our activities.”

Being two centimetres shy of three metres in length, the iQ concept ‘takes a radical approach to vehicle packaging and design.’ It challenges the current limitations of ultra-compact urban transport by having a versatile interior that can accommodate three adults, plus luggage space or seating for a fourth, child passenger.

The iQ concept is designed to convey confidence and vibrancy in every aspect, giving it ‘urban high fashion status’.

The iQ, Toyota claims, is the world’s smallest four-seat passenger concept car. At 2,980mm long, it is 425mm shorter than Aygo, but comparable to Yaris in width and height (1,680 x 1,480mm).

The panoramic glass sunroof adds to the light and open feel of the cabin, says Toyota, adding ‘while at night the interior has a darker, more mysterious ambience, adding to the iQ concept’s high fashion quality’. Mysterious?