Toyota is axing its Scion iQ after the smallest car in the automaker's lineup didn't sell well in the United States.

When the Japanese carmaker relaxed guidelines for dealers ordering the vehicle, U.S. sales of the iQ dropped by half to 2,040, Bloomberg reported.

The Toyota brand can't afford to keep an unpopular model on board since it needs to sell at least 100,000 vehicles to be sustainable, a mark it last reached in 2008. Scion hopes an infusion of new products will help boost sales.

When it comes to Scion's smallest model, American buyers apparently weren't impressed by the tiny iQ's 120-inch length even though Toyota put 11 air bags in the vehicle and developed it to pass crash tests with a four-star rating.

"Physics are physics, and they're nervous about driving a vehicle that size," Scion brand chief Doug Murtha told Bloomberg, calling the iQ a "healthy experiment" in what will appeal to U.S. consumers.

Starting at $16,435, the premium small car has the best combined mileage rating of any non-hybrid vehicle sold in the U.S., with 37 miles per gallon in city and highway driving; however, its mpg ratings weren't enough to draw U.S. buyers.

"We've learned lessons on all of those fronts and that's going to influence how we approach vehicle development going forward," Murtha said.

Scion has a production version of its iM Concept that is expected in April. The iM and a new Scion sedan will be featured at the New York auto show and then be available in the second half of the year.

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