Toyota Launches Hybrid Corolla, Keeps It In Japan

Longtime Kaizen Factor readers are probably well aware of our deep respect for and debt of gratitude towards Asia-based, English-writing automotive correspondents whose scoops, insights and opinions have informed a number of our stories. Chief among them are freelance journalist Peter Lyon, Automotive News’ Asia editor Hans Greimel and former editor-in-chief of The Truth About Cars Bertel Schmitt, whose personal and insightful report on the Japanese domestic market launch of the Toyota Corolla Axio Hybrid sedan and Corolla Fielder Hybrid wagon we are very pleased and privileged to bring you.

Today, Toyota launched its hybrid version of the Corolla in Tokyo. It was done in the trademark frugal style of Toyota JDM car launches: A sparse meeting room in the building that houses Japan’s auto manufacturer association JAMA, a PowerPoint projector, a small bottle of water per reporter, that was it. No smoke, no dancing girls, the cars had to be viewed outside in the driveway. If you are used to the hullabaloo of American car launches, you would have been shocked. If you are part of the Tokyo press corps, you don’t know it any other way. TMC’s hefty profits have a few reasons, and cutting out of muda, elimination of the dreaded waste, is one of them.

Toyota’s 11th generation Corolla was launched onto the Japanese market in May 2012, with a spiffier and bigger U.S. model following a few months ago (this time with American aplomb). Much to the chagrin of parts of the media, no hybrid versions of the Corolla were offered. Today, with as little fanfare as possible, this was changed. At least as far as the Japanese market is concerned.

When the new Corolla was launched in 2012, the thinking at TMC went that 21.4 km/liter for the Axio sedan with idling stop (stop-start) was frugal enough. The Japanese customer, however, had a different opinion, and demanded a hybrid powertrain, Toyota’s deputy chief engineer Hiroshi Nakamura tells me on this hot and muggy Tokyo morning. Toyota went on a crash program. In a record one year and two months, the Corolla had a hybrid powertrain, and the demanding Japanese customer sees its wishes fulfilled.

Equipped with Toyota’s 1NZ-FXE 1.5-liter THS II hybrid system with reduction gear, both the Axio sedan version and the Fielder wagon variant of the Corolla achieve a fuel efficiency of 33.0 km/liter under Japan’s (notoriously optimistic, we spare you the EPA conversions) JC08 test cycle. The results come very close to the Prius c (sold in Japan as the Aqua), which sports a 35.4 km/l rating.

TMC’s engineers shrunk the formerly bulky hybrid system down to a compact package that easily fits into a compact car without taking up precious space, leaving interior room and trunk space unimpeded by the hybrid system. Hybrid battery and fuel tank are tucked away under the rear seat. The tank lost only 6 liters (1.6 gallons) versus the all-gasoline model, and it wasn’t much of a sacrifice. The theoretical range of the hybrid Axio is 1,188 km (738 miles) on a single tank, 289 km (179 miles) more than the all-gasoline model.

The cost of the hybrid system has come down, but it still comes at a premium. When the regular Axio went on sale last year, it started at 1,357,000 yen. The hybrid version costs upwards from 1,925,000 yen, remaining below the psychologically important 2 million yen (US$20,000) barrier. The Hybrid G Aerotourer WxB special edition Corolla Fielder with a stylish black interior and a faux carbon fiber dash costs 2,340,000 yen.

It may have taken Toyota only a year and two months to react to the market forces, but they have been evident for a while. Toyota’s Prius has been on top of Japan’s sales charts since 2009. It recently has been toppled by its Aqua sibling, which is sold in the U,.S. as the Prius c. In the first seven months of the year, the Aqua sold 160,993 units in Japan, followed by the Prius with 155,539 units. Taken together, the Prius and the Aqua, a.k.a. Prius c, sell three times more than the 3rd-placed Nissan Note in Japan. In the much larger U.S. market, all Prii together sold 138,477 units January through July, that’s less than half of the Japanese volume. The market share of all hybrid cars wallows in the 3 percent range in the U.S.

This may be the reason why the hybrid Corolla should remain a Japanese phenomenon until further notice. Toyota’s spokesfolk said today that there are no plans to sell a hybrid Corolla outside of the country, and that the Prius is seen as carrying the hybrid flag for a while. As the example of the Corolla shows, these opinions can change with the market, and with sinking price premiums of the hybrid system.

The hybrid Corolla will be built in Toyota’s Miyagi plant, which assembles hybrid cars for the first time. 2,500 units of the monthly run rate of 8,000 JDM Corollas are expected to sell with the hybrid power-train. The car can use a little lift in Japan. The global bestseller is an also-ran at home in Nippon. On the January through July Japanese sales chart, the Corolla sits in rank 8.

Article and all photos by Bertel Schmitt