Would 007 drive something this tiny?

Why would the maker of high-end sports cars closely associated with James Bond want to wade into the budget-priced commuter car market?

That's what some might be asking upon hearing that Aston Martin, maker of the $300,000 DBS favoured by 007, is getting into the micro-car business with the help of the world's largest automaker, Toyota.

The niche automaker has announced it will be producing the Cygnet, a small car heavily based on the $20,000 Toyota iQ-based commuter city car. The iQ, first seen at the 2007 Frankfurt auto show, went on sale in Japan last October and this year in the U.K.

Aston will position the Cygnet – or young swan – as a "luxury commuter" model. While the iQ trails the DBS in power and size, it can seat three adults – two in front and one behind – compared with only two for the current 007-mobile.

In the U.K., the Smart Fortwo-like iQ gets three-cylinder gas and diesel engines.

"The offering of an Aston Martin Cygnet with a DBS, DB9 or Vantage is a unique combination of opposites and a novel transport solution," said Ulrich Bez, chief executive officer of Aston Martin.

"Novel" is one word for it. "Slow" might be another. With a glacial 0-to-100 km/h pace of 14.1 seconds for the iQ, the Cygnet will pose little threat to any current Aston.

The real reason the carmaker is interested in the micro-car? Its 4.3 L/100 km fuel consumption rating.

Aston Martin, like all car manufacturers, is facing more stringent emissions and fuel use laws in both the EU and U.S. Given the few numbers of the V12 Vantages Aston sells, any car like the Cygnet that burns less fuel will help offset the fleet average.

Strange bedfellows

If the idea of an Aston Martin-badged Toyota micro car has you checking the calendar (no, it's not April 1), how about speculation that the same Japanese automaker may offer to supply a version of its Prius gas-electric hybrid to arch-rival General Motors?

A Bloomberg report says Toyota and GM executives will meet in August to discuss the idea of a GM-badged car based on the Prius.

Allegedly, Toyota is looking at the California plant the two automakers have shared since 1984 for Prius production, instead of a yet-to-be-completed plant in Mississippi.

Right now, the GM-Toyota plant makes the Toyota Matrix for the U.S. market. The Pontiac Vibe, GM's most recent product made there, will stop production at the end of August, with no replacement officially planned.

Why a hybrid deal? Remember: GM sold Saturn to auto magnate Roger Penske, so those hybrids are no longer in the fold. GM has also said the Chevrolet Malibu mild hybrid will be gone in 2010. So, except for the plug-in electric Chevrolet Volt (expected next year), GM won't have any passenger car hybrid offerings in the short term.

From the outside, the idea of adding more GM hybrids and allowing Toyota to make more of its popular Priuses in the U.S makes sense. But some are deservedly skeptical.

"It might make sense if GM also shares component development for its sedans with Toyota," said Jim Hall of auto consultants 2953 Analytics. "But Toyota is not normally in the practice of giving away the crown jewels."

Diesels in the dust?

The poor economy and the increasing costs of meeting tougher tailpipe emissions standards has put on hold several diesel-powered cars planned for 2010.

In an Automotive News report, only Audi, BMW, Mercedes-Benz and Volkswagen are continuing with plans to launch new diesel models in the next year.

Chrysler, Ford, General Motors, Honda, Nissan and Toyota have halted diesel programs because of increasing costs and internal reorganization issues due to the poor economy.

A diesel engine usually gets 20 to 30 per cent better fuel economy than a gasoline engine. But it can add thousands of dollars to a new vehicle's price.

Other diesel hardware – a turbocharger, high-pressure fuel injection system and diesel particulate filter – adds to the costs as well.

Profit margins aside, the image of the diesel engine may be one reason Toyota has halted its plans.

"One of the obstacles of the diesel is the aged perception that the diesel is smoky and stinky. It's hard to change the mind-set of consumers. Hybrid technology has such a clean halo to it," said Toyota USA spokesman Curt McAllister. "We are banking heavily on hybrids."

Chrysler firms up Fiat plans

Chrysler is moving ahead with plans to build and sell the Fiat 500 city car here starting in 2011.

The location of its North American plant hasn't been decided yet (it's down to a pair of Chrysler plants in either the U.S. or Mexico).

But Chrysler has confirmed it will sell four versions of the small Fiat: a hatchback, convertible, station wagon and a sporty Abarth version of the hatchback.

Despite the variety of body styles, all 500s will be some of the smallest cars on the road here.

The 500 hatchback is about 83 cm longer than the Smart Fortwo, but about 25.4 cm shorter than Toyota's Yaris hatchback. At least the tiny Fiat seats four, unlike the two-seater Smart.

The 500, which debuted in Europe in 2007, will be a Fiat here.

There are no plans for other Fiat-badged models here yet.