For me, Toyota is a brand that has always been a bit like a filler track on a less-than-spectacular album. It comes down to personal preference, but I've never seen the Tokyo car giant produce something that has amazed me... until now.

The smallest thing to come out of Japan since the Tamagotchi, the Toyota iQ emerges at a time when everybody is cutting down their emissions and going ‘green' to save money, and with a Co2 output of just 99kgm means it's tax exempt. All sounds like it's got the green light, but then there's the price. A whopping £10,495 could be enough to deter the determined money-saver and send them over to the obvious rival, the (far cheaper) Smart ForTwo.That would be a mistake; the £3,000 price difference is plenty justified. At less than three metres, the iQ is just under three centimetres longer than the Smart. Now that doesn't sound like much, but when you get inside you'll wonder how Toyota have managed to squeeze two extra seats out of it. Surprisingly deceiving, the city car doesn't make you feel like you're in a shoebox, unlike the Smart. Instead it welcomes you and three friends, providing one of them has no legs.

The interior isn't too bad; there are some nice gadgets, but there is simple and then there's simple. I could count the number of button controls on one hand. The control on the steering wheel is particularly difficult to skip tracks or turn off those annoying traffic reports that cut in at the best part of the song, and the LCD display is so small that it looks like binary code from behind the wheel. Still, I prefer it to the ForTwo's interior, which is a little too ‘Space Invaders' for my liking.

What's more, the iQ actually drives well. Its unique front wheel differential means it has a turning circle nearly twice as little as the renowned London black cab. It takes corners a lot cleaner and it doesn't feel like it's about to fall backwards when you put your foot down on the motorway.

So, with surprisingly little similarities to the Smart aside size, perhaps I should instead look back fifty years at something a little more comparable, like the first ever Mini. In 1959, the Mini sprung onto the scene and became an original icon of the 60's, selling 5.3 million units to date. Although I disbelieve that the iQ will ever reach the same iconic status as the Mini, the innovative design and driving pleasure is enough to make me a consider Toyota a more dynamic brand with a bright future.

Could this Toyota's iPod moment? Maybe, but nevertheless, the iQ is stand-alone proof that good things do come in small packages.