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We first saw the Concept Car iQ at last year’s Frankfurt Motor Show and were somewhat confused as to what Toyota was actually thinking. Nonetheless the Toyota iQ will go into production later this year. So it’s no surprise them to find it out and about being tested.

Toyota plans to complete with the Smart fortwo and take a chunk of the compact urban transportation market share.

2009 Toyota iQ spy photos

However unlike the fortwo, the iQ has the capability to seat up to three passengers – and it’s less than three metres in length. Plus you can still fit a child or luggage.

2009 Toyota iQ spy photos

Toyota has spent considerable engineering hours working this on out, but the company believes it will be a success and hailed as a breakthrough in space innovation.

2009 Toyota iQ spy photos

You can read more on the iQ here. More photos can be found here.