The race may now be set not to go to the swift, but the small. Toyota, evidently spurred by the positive reception to Daimler’s Smart car, is planning to bring the Toyota iQ model to America soon after it’s introduced in Japan this November, and Europe next January. Japan has already proven itself to be a receptive market for small cars, and Toyota says that the only thing standing between the iQ and similar success in the United States, is meeting American safety standards. If all goes as planned, the iQ has the potential to give the Smart —currently the littlest car sold in the U.S.—some serious competition in terms of fuel economy and versatility in the micro class.

For starters, the iQ is a four-passenger vehicle while the Smart only carries two. Some might quibble over the size of the iQ’s backseat, and question whether the car can comfortably carry four American adults—Toyota actually told journalists it was a “3 ½-seater,” as if to excuse a semi-functional rear seat.

The iQ is larger than the diminutive Smart, but not by much. Its wheelbase is a little more than five inches longer, and on the whole, the car is only about a foot longer than the Smart—11.4 inches to be exact. That said, its slightly larger size and some under-the-skin engineering wizardry will give the iQ better handling than its competitor, according to Hiroki Nakajima, the vehicle’s chief engineer.

Nakajima also told Automotive News that the iQ will have the best fuel economy of any Toyota other than the Prius. The Prius is currently rated at 48 City/ 45 Highway, while the Yaris gets 29/36—Daimler’s Smart gets 33/41. Chances are, the Toyota iQ will be very close to the Smart in terms of fuel economy, and if it does any better, it’s likely to be only a mile or two difference per gallon.

Although it’s 33 inches shorter than the Yaris, Toyota claims the iQ has more interior space due to engineering advances such as smaller heating and air-conditioning units and high-tensile steel frames that allow thinner passenger seats. The iQ will also be priced close to the Yaris, which could make it a sub-$10,000 vehicle in base trim. The Smart starts about $2,000 higher.

In Japan (and most likely the U.S.,) the Toyota iQ will come with either a 1.3 or 1-liter gasoline engine. The latter is the same size as the Mitsubishi powerplant that is found in the American Smart. In Europe, the iQ will offer a 1.4-liter diesel, which should turn in even better fuel economy. The European Smart diesel clocks in at more than 60 mpg on the highway.

The good news is that more choices in the mini car arena are just what consumers are asking for right now. If the U.S. version of the iQ can deliver breakthrough design features at an enticing price, it could be the first step toward turning micros from a mere curiosity to a mainstay on American roads.