Is this a prototype for a new Toyota Smart competitor?

Peugeot 107 near Ann Arbor, click for high-res gallery

For the past six months, I've been seeing several Peugeot 107s on the road in the area near my office and home. At first I speculated that maybe Peugeot might be plotting a return to the US market at the entry level. Given the low value of the US dollar of the against the Euro right now and for the foreseeable future, it doesn't seem like it would make a lot of sense for PSA (Peugeot's parent company) to return with a car like the 107 that would have slim margins at best.

It turns out that I missed a couple of stories relating to the 107 over the past year. I knew that the 107 had a Citroen-badged twin dubbed the C1. However, the C1/107 are built in a plant in the Czech Republic in a joint venture between PSA and Toyota. Toyota sells a variant with slightly different styling in Europe as the Aygo. Last September it was reported that Toyota was developing a Smart competitor named the Aygo, for possible US introduction by 2008.

Toyota has a US Technical Center on the eastern edge of Ann Arbor about two miles from where I see the 107s on an almost daily basis now, heading in the direction of the Tech Center. Is it possible that Toyota is using the Peugeot 107 variant for testing here to throw people off the track without having to resort to lots of camo? Is this the new entry level Toyota below the Yaris? Only time and Toyota will tell. In the meantime, the current Aygo is available with a 1.0L gas three cylinder good for 50hp, or a 1.4L 54hp diesel four cylinder. The diesel is rated at 4.1L/100km (57.4mpg).

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