The Matrix will be available in three trims: Standard, S, and XRS. The interior of all three has bright white-lit gauges offsetting red-lit needles and a large, dominant speedometer. Everything from sport seats to the three-spoke steering wheel is new. However, much of the brightwork and interesting design of the prior Matrix have given way to cheaper, monotone materials, and thus, in spite of additional equipment and so-called upgraded fabrics, it’s hard to consider the new interior much of a step forward in design.

Yet, even with all of its fashion faults we are happy to see that it is available with a lot of cool new features, including Toyota’s latest navigation system with XM traffic reporting, a JBL audio system, and stability control (the latter available across all trim levels). Storage space, too, is impressive, with cubbies upon cubbies and a massive glove box. And in terms of safety, besides stability control, there are no options: Six airbags come standard.

Under the hood, the Matrix Standard and the Matrix S sport a new 1.8-liter, four-cylinder engine that generates 132 horsepower and 128 pound-feet of torque and featuring dual VVT-i (variable valve timing with intelligence). The Matrix S is also offered with all-wheel drive. The brakes, too, have been upgraded to four-wheel discs. Transmission choices are a five-speed manual or a four-speed automatic. Toyota says it expects at least 30 mpg from its new small cars, and the Matrix has been engineered to accommodate a hybrid powertrain as well, which we expect to hear more about within a year.

The 1.8-liter inline-four revs smoothly, if not terribly quietly. Feel through the tilting-and-telescoping steering wheel was rather tepid and springy. All in all we were looking for an improvement in the model line-up. Perhaps next year we will have more luck.

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The Land Cruiser’s engine – 5.7-liter V-8 – is unchanged for the Land Cruiser and retains its 381-horse and 401-lb-ft of torque power figures. It’s mated to a six-speed automatic transmission with a sequential shift mode that allows for manual gear selection, automatically shifting into first gear when the vehicle comes to a stop.

Unlike many SUVs on the market today, the Land Cruiser is fitted with a proper transfer case. Equipped with a Torsen limited-slip locking center differential, the transfer case allows full-time four-wheel drive, with a rotary dial serving as the switch between high and low range modes. The differential’s locking function is engaged at the press of a button.

The suspension, designed with off-road capability in mind, features a live axle in the rear and a double-wishbone setup up front. Also part of the suspension package is Toyota’s Kinetic Dynamic Suspension System consisting of a pair of hydraulic control cylinders that roll stiffness to best match the suspension’s geometry. Stopping power comes by 13.4 inch discs with four-piston calipers up front and 13.6 inch discs at the rear. Towing capacity of the 2008 Land Cruiser is a considerable 8500 pounds and the maximum payload is 1585 pounds.

A new CRAWL control engages when the transfer case is shifted into low range. This system manages engine speed and output and braking force, slowly moving the vehicle forward or reverse and enabling the driver to concentrate more on navigating steep grades or extremely rough terrain. CRAWL control also includes Downhill Assist Control to maintain a constant preset speed while descending down an incline.

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The Blade, which is currently sold in Japan is powered by a 158-hp 2.4-liter four-cylinder, same as numerous Toyota products including the Camry. That would be a useful improvement over the Matrix’s current 126-hp 1.8-liter four. All-wheel drive is optional, as it was on the Matrix until 2007, when it was dropped along with the more-powerful, high-revving 164-hp 1.8-liter engine choice.

However, the Blade will get unique sheetmetal for the U.S., which will be substantially different from the Japanese-market Blade shown here. The Matrix never sold all that well in the U.S., and insiders say Toyota will be targeting the popular Mazda 3 with the Matrix’s replacement.

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“We feel there’s a hole in our lineup,” says Kevin Hunter, the vice president of Calty Design Research. “Toyota hasn’t had a sports car since the Supra was dropped in 1997. We need some emotional punch in our lineup, a halo product.” Toyota envisions that punch to be a rear-wheel-drive Hybrid Sports Concept (HSC) that develops 400 horsepower. “It’s a new kind of sports car for the 21st century,” adds Hunter. “Eco and emotion in a sports car concept with a performance target of 0-60 mph in about 4 seconds and a price tag in the mid-$30,000 range.”

A 3.5-liter V6 engine would deliver most of the thrust, and it doesn’t require too much brainpower to connect the dots to the DOHC 3.5-liter V6 in the Lexus GS 450h, which already makes 292 hp at 6,500 rpm. You wouldn’t have to look too far to find an electric motor to deliver the rest, because the water-cooled, 650V electric motor used in the GS 450h makes 197 hp at peak output, though this is just for seconds at a time.

The Calty designers, who have been working on the FT-HS for an entire year, are even willing to suggest that once the future arrives, a hybrid powertrain will be necessary to achieve the feeling of ultrahigh-performance that you want in a sports car. In a fuel-efficient future, a jolt of acceleration from an electric motor might become the equivalent of an injection of nitrous oxide into your gas-powered engine.

All this has overtones of ecological friendliness, of course, but as the buzz about global warming and greenhouse gases becomes a part of daily life, Calty’s designers remind us that a hybrid powertrain will have a certain quotient of respectability that you won’t find in a supercharged big-block V8. The FT-HS is even painted white because white is not only a pure motorsports color, but it’s clean which, Hunter tell us, supports the car’s hybrid message.

This is meant to be a 2+2-style car, large enough for occasional backseat passengers. We probably shouldn’t be surprised that it’s nearly as big as a Corvette, since it’s going to take a lot of space to package an engine, a fuel tank, an electric motor and a battery pack. The restrictive trunk volume of the Lexus GS 430h shows us just how difficult this task can be. The HSC’s long wheelbase should help balance the weight of the sizable battery pack that will be required. In fact, the HSC’s weight distribution might even approach the magic mean of 50-percent front/50-percent rear as a result.

The HSC has a hyperaggressive triangular profile, and this theme is repeated throughout the design. Meanwhile, much of the mass has been subtracted beneath the surface to create a shape that looks like an insect’s exoskeleton. Apparently the design has been inspired by the look of a downhill speed skier, in which individual aerodynamic elements are more important than overall streamlining. “Vibrant clarity is our new Toyota design language,” Hunter tells us. “And the car is packing plenty of J-Factor, which is the local and global acceptance of Japanese design.”

As envisioned by the Calty team, the engine will be visible through a hole in the hood to emphasize its hybrid nature. That dark portion in the middle of the hood is actually the engine cover poking through, much like a shaker hood scoop from the 1960s.

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We always expected that Toyota would rely on its own Hino Motors commercial truck subsidiary for a diesel engine to power a heavy-duty version of its new Tundra pickup, but Hino is not prepared to make smaller diesel engines for passenger cars and potentially diesel hybrids.

Isuzu offers Toyota the know-how and production capacity for diesel engines that are smaller than 2.5-liters, which makes the purchase seem like a perfect fit. Mitsubishi will now become the largest single shareholder in Isuzu with 9.7% of the stock, followed by trading house Itochu Corp. with 7.2% and Toyota with 5.9%.

GM sold all of its stock in Isuzu back in April, which amounted to 7.9%. Today’s announcement marks the second time Toyota has swooped in and picked up shares in a company that GM has cast off, the first being Fuji Heavy Industries, the parent company of Subaru.

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The sedan actually saw a 13% increase in sales during the first half of 2006 because of rising gas prices. Generally, vehicles six years into their life cycle see a decline in sales. Toyota doesn’t seem to mind that Honda is seeing success with its redesigned Civic and will patiently wait until 2008 to update the Corolla.

It already has the all-new Camry, RAV4, FJ Cruiser and Yaris to sell, and in January 2007 it will roll out an all-new Tundra pickup. So that should free up some time for those busy engineers.

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The second-generation Yaris was styled at Toyota’s European design studio, ED² and Toyota Motor Corporation (TMC) Design Division. The Yaris is offered as both a liftback and a sedan for the U.S. and is designed to offer a level of style and fun-to-drive performance that is often not found in the subcompact class while the interior provides a surprising level of roominess and comfort.

The 2007 Toyota Yaris is offered as a 3-door hatchback and a 4-door sedan, with a Sport trim level for the sedan. Both the hatchback and sedan are powered by a 106-horsepower 1.5-liter engine with either a 5-speed manual or 4-speed automatic transmission.

Standard equipment includes air conditioning, tilt steering wheel, a gated shift lever with the automatic transmission, tinted glass, digital clock, a map light, intermittent windshield wipers with mist control, and dual sunvisors with vanity mirrors.[MSNAutos]

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Traction/antiskid control is available on S and LE. Power windows, locks, and remote entry are standard on LE, optional otherwise. Leather upholstery is no longer available. The redesigned Corolla expected for 2008 will now be an ‘09 model. Toyota says the postponement reflects an overtaxed engineering staff, but the real reason, we hear, is that the original design looked dull once the latest Honda Civic appeared, and is being sexed up.

However it looks, the next Corolla should be somewhat larger, roomier and heavier than today’s version, which implies a larger 4-cyl engine with more power to cope. A gas-electric version is said to be in the mix, though it probably won’t arrive before model-year 2010.

The first hybrid Corolla is expected to use a new, more-compact powertrain that Toyota says will cost half as much to make as earlier systems. That should narrow the price gap with regular versions.[ConsumerGuide]

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A newly distinctive offspring of that iconic FJ40 will start appearing on-and off-roads around the country. It will be called the FJ Cruiser so that Toyota still can offer the slow-selling flagship Land Cruiser, which has strayed far from the Jeep-like FJ40 Land Cruiser in its hugeness and plushness. Based on 4Runner underpinnings, the production FJ Cruiser is remarkably unchanged from the well-received and highly cartoonish concept that debuted at the 2003 Detroit auto show. Toyota revealed the exterior prototype of the production vehicle at this year’s Chicago show in February, hailing it as a return to the roots of SUVs.

The FJ’s unusual appearance is definitely more arresting than its competitors’. Deliberate styling cues from the first-generation Land Cruiser include round headlights with an integrated grille, the upright windshield, the white-cap roof, and wraparound rear glass. An unlikely childhood friend of senior creative designer Jin Won Kim also influenced the FJ’s development. “I had a pit bull when I was growing up,” says Kim. “I’ve been inspired by the stance of the pit bull when it’s about to attack-it’s got that forward-leaning gesture and a really strong stance.” It’s also a novel refutation to the suggestion that Toyota is merely jumping on the recent retro-styling bandwagon.

“The original FJ40 had this kind of really funky balance. It was the charm of the design that made it. But we really didn’t want to push this one to the retro side. We’re playing it off of the heritage and spirit of the FJ40,” says Kim, who designed the original FJ Cruiser concept and the 2004 Lexus LF-C concept car.

“The Volkswagen New Beetle, the Ford Thunderbird, and the Ford GT, for example, are definitely more on the retro side. To me, those are basically the same car as the originals, with the same proportions and balance, but with a more modern sheetmetal cover. With this car, we took some of the design cues, but we didn’t take the whole proportion of the vehicle. It’s not just a basic evolution of the design.”

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The federal tax code has massive ramifications for car sales. The high gas prices have hit SUV sales, but the sales did drop before the gas prices shot up. They declined, at least at first, because business owners’ tax breaks on large trucks and SUVs dried up.  Now, the tax code is affecting hybrid sales, and the Prius is not the “gotta have it” car it used to be. While customers used to endure the price markups and the waiting lists, these days someone will rarely find people willing to pay more than the manufacturer’s suggested retail price for new Prius models.

The hybrids are known for combining traditional gasoline-powered internal-combustion engines with the assistance of electric motors. “Full hybrids,” such as the Prius, can run on electricity alone, while the “mild hybrids,” such as the Chevrolet Silverado Hybrid pickup, cannot. The electric assistance helps cars to use less fuel and emit fewer pollutants into the air.

The Prius, at times, burns absolutely no fuel. At stoplights, its engine will shuts off and the car will switch to battery power. The car also has “regenerative” brakes, which capture thermal energy created by braking and convert it into potential energy for the car to use. Sounds pretty great, right? But people who are interested in hybrids are running into several obstacles. For one thing, if you only buy American cars, and you don’t want to drive a pickup truck, there are only three hybrids from which to choose, and all of them are SUVs. For another, hybrids have premium prices. The base price of the Ford Escape Hybrid SUV is more than $6,000 higher than that of the regular Escape. The base price of Lexus‘ GS 450h hybrid sedan is $11,000 higher than that of the regular GS.

Another obstacle is the small number of hybrids that are on the market, and the low rate at which new ones come out. This has not been a great year for hybrids because of the rareness of new-model introductions. When the annual hybrid buying guide was published last October, the list had ten models on it.

This year’s list has 13 models, meaning only three new hybrids have come out since then: Lexus’ GS 450h sedan, General Motors‘ Saturn Vue Green Line SUV and Toyota’s Camry Hybrid sedan. Two of the world’s largest automakers, DaimlerChrysler and Nissan Motor, still do not offer hybrids. Now Daimler’s Dodge subsidiary does sell a hybrid Ram pickup to fleets, but the general public is unable to buy it. New Nissan, Dodge, GMC and Toyota hybrids are all slated to enter the market in 2007. 

There is a rumor that Lincoln is working on a hybrid version of its new MKX SUV, but Lincoln declines to confirm any reports. Early next year, Lexus will begin selling a hybrid version of its new LS flagship sedan. This hybrid will have more power than a Corvette and will continue a trend in which automakers use hybrids’ electric motors to enhance the performance, not just increase mileage and improve fuel emissions.

The hybrid tax credit was a hot offer, which replaced a $2,000 tax deduction that applied in 2005 (tax credits are more valuable than tax deductions). But for Prius models delivered after this month, the credit will be cut in half. The Prius continues to run in short supply, and in some places there are still two-month waiting lists, so if you take delivery of a Prius on Oct. 1, having made the deal on Aug. 1, you will have lost out on the incentive. The tax credit was created to encourage hybrid sales, but the IRS feels that once a manufacturer sells hybrids in high volumes, it no longer needs the discount.

When an automaker’s hybrid sales for the year reach 60,000 units, the clock begins to tick.  The full credit applies through the calendar quarter following the quarter in which the 60,000-unit point is reached; Toyota Motor and its Lexus subsidiary, together considered one manufacturer, reached that point in May. After the three-month grace period, the IRS cuts the credit by 50% for the next six months. Then it cuts the original credit by another 25% for the next six months. After that, it cuts off the whole deal. With any hope this will not kill any chances for the hybrids to return.

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