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Toyota didn't get where it is today—the biggest, richest car company on the planet—by taking chances. With the notable exception of the Prius hybrid, Toyota styling is conservative to the point of boredom. And aside from its hybrid leadership, Japan's automotive giant is rarely an innovator.

The trend toward downsizing, in both cars and engines, ought to be in Toyota's favor. But although the company has plenty of economical babies in its global portfolio, it lacks a premium minicar. Mercedes' Smart brand and BMW's Mini have shown the world that small cars don't have to be cheap.

Toyota wants a part of this expanding niche, and the iQ is its contender. It is significant that the concept emerged not from Japan but from Toyota's European design center, located in France.

The new iQ brings both style and innovation. Its size dictated both: a length of 117.5 inches, a mere 11.4 inches longer than the Smart Fortwo, but unlike the Smart, the iQ seats four. The most admirable thing about the iQ is its packaging—the way in which the mechanical parts have been compressed to gain passenger space.

Keep Reading: 2010 Toyota iQ - First Drive Review