The IQ was originally launched as Toyotas's premium offering in the city car segment - much in the same way as Fiat offer the 500 above the Panda, GM offer the Adam above the Aguila, etc.
The reasons for dropping the IQ from some European markets (including the UK) are various, but include the unfavourable exchange rate between the Yen and European currencies, which makes Japanese built cars expensive compared to European built cars, the fact that after six years in production the IQ was at the end of its production life, and that modifications to the IQ to comply with forthcoming EU legislation were too expensive for the sales volumes.
Production of the Verso S and the Urban Cruiser faced similar difficulties with the exchange rate, and again the Urban Cruiser was nearing the end of it's production cycle.
Daihatsu pulled out of Europe due to the exchange rate.
Car companies are still looking to reduce production costs - which is why the next generation Jazz for the UK market will be sourced again from China (as were later versions of the first generation Jazz).
The IQ has never been available with the Multi Mode Transmission - instead using a CVT for the automatic option. Use of the MMT also ceased in the third generation Yaris dating from 2011 - again replaced with a CVT.
As the Aygo is a Europe only model, Toyota may have other plans to satisfy the home and US markets where the IQ is also sold.
Edited by Auristocrat on 28/08/2014 at 18:03
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