Toyota unveils 10th generation Corolla

updated 5:16 p.m. ET Oct. 31, 2007

LAS VEGAS - Toyota Motor Corp. on Wednesday unveiled the 2009 Corolla, the 10th generation of the reliable subcompact sedan that became a best-seller after being introduced to the U.S. market four decades ago.

The car was introduced in Japan in 1966 and crossed the Pacific two years later. Since then, more than 30 million have been sold in 142 countries.

The new model, shown at the Specialty Equipment Market Association trade show, was designed to be sportier, with a larger interior, wider chassis and a more economical and powerful 1.8-liter engine, the company said.

The car is expected to get 27 miles per gallon in the city and 35 mpg on the highway under new Environmental Protection Agency standards, Toyota said. It puts out 132 horsepower, six more than the previous model.

Tougher standards make it appear to be less fuel efficient than the 2008 model, which is estimated at 28/37 mpg with a manual transmission, but the reverse is true, the company said.

"It's putting out more power and has better fuel economy than it's predecessor," said Mike Michels, a spokesman for Toyota Motor Sales USA Inc. "But if you look at the outgoing Corolla, those numbers will look higher. It's because the EPA changed the rating method."

The decked-out XRS model comes with front and rear spoilers and a 2.4-liter engine capable of producing 158 horsepower, with estimated mileage of 22/30 mpg. The engine is almost identical to that in the current Camry, a larger sedan.

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"The acceleration is better than Camry," said chief engineer Shinichi Yasui, noting the XRS Corolla can go from zero to 60 mph in 8.1 seconds. "This acceleration is top of class for a small car."

The company also is aiming at tech-savvy, urban buyers by offering the Corolla for the first time with the option of touch-screen navigation and real-time traffic capabilities.

Toyota also revealed the second generation of the Matrix, the hatchback version of the Corolla.

It features a lower, sportier profile, with a curvier backside and a front windshield more in line with the hood, making it look more like a small, crossover sport utility vehicle.

"The current model ... looks like a wagon," said Matrix chief engineer David Terai. "There are some people who don't like that. We wanted to get more younger buyers."

The new Corolla and Matrix are expected to reach dealerships in February, with pricing between the entry-level Yaris and the top-selling Camry sedan.

The company said it expects to sell 300,000 Corollas and 60,000 Matrix vehicles in the U.S. by the end of 2008, representing a combined 18 percent of its annual volume.

In 2006, Toyota sold 387,388 of the two models combined in the U.S., up 13.5 percent from a year earlier.

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