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These days there are reasons to be cheerful if you want a family hatchback without paying a ‘made in Germany’ premium.

Look elsewhere on this website and you’ll learn Ford’s latest Focus has rediscovered the dynamic sparkle that made the original so special. Kia’s Ceed, built on a new platform and now with a fully independent rear axle, can’t match that level of dynamism but handles with a precision and honesty that will jolt anybody whose perception of the brand is more than a couple of years out of date. There is then the pebble-like form of Mazda’s new 3, which promises to drive almost as lithely as it looks.

Toyota would have you add the new Corolla to that list. Confused? Don’t be. That name hasn’t been seen in this country for more than 10 years, but the sharp-edged hatchback before you (along with its estate and saloon derivatives) is essentially a direct replacement for Toyota’s ultra-pragmatic but slow-selling Auris. And it is a model of monumental significance for the brand – a revival of the world’s top-selling nameplate, at least in Europe, where the competition is fiercer and the standards higher than anywhere else in the world.

Beyond the name, what else is new for the Corolla?

The rebrand reflects the fact that much has now changed, not least the underpinnings. Toyota’s New Global Architecture platform sits the powertrain 10mm lower for a commensurate drop in the car’s centre of gravity and improved handling. The structure of this 12th-generation Corolla (born in 1966, the saloon original predates the Golf by some eight years) is now 60% stiffer than the old one, and independent rear suspension is now standard. The geometry of the MacPherson struts at the front axle has also been realigned to deliver more communicative steering, all of which sounds promising.

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Looks are, as ever, subjective, but if the Auris was blandly handsome then in the metal the Corolla is just handsome. Its bottom might jut out in the manner of the old Renault Mégane, but sitting 40mm longer, 30mm wider but 25mm shorter than its forebear – and with smaller overhangs – the proportions are there. A Focus has a considerably longer wheelbase and a Golf more head room, but if you can forgive the Toyota its false exhaust tips, it’s the more distinctive car.

At launch, Toyota will offer a 112bhp 1.2-litre turbo petrol engine along with two versions of its Atkinson-cycle hybrid powertrains, which Toyota expects to account for almost nine in every 10 sales. The 1.8-litre VVTi is identical to what you’ll find in the Prius, in fact, and with a combined WLTP economy of up to 65.9mpg but only 120bhp from electric motor and petrol engine combined, its priorities are clear. The 2.0-litre powertrain driven here blurs the lines a bit. With 178bhp and a 0-62mph time of 7.9sec, it’s quicker than either the equivalent Honda Civic or Ford Focus, but remains an economy-focused device, with CO2 emissions of just 89g/km and a spec-sheet claim of more than 60mpg.

What is the new Corolla like inside the cabin?

Predictably, our car is in Excel guise – the top of four trim levels, and in this case augmented with an optional panoramic roof and a two-tone paint finish (though the upper portion seems more like a wrap). Lesser models get smaller wheels than these 18in two-tone items and go without privacy glass and electric door mirrors, though all come with LED headlights and body-coloured bumpers. Certainly, sat side by side, the difference won’t be night and day.

It’s a similar story inside. Though we’re yet to get a sniff of the Corolla in its most basic Icon form, apart from swapping the 7in display in the instrument binnacle for one of 4.2in, the interior is unlikely to differ dramatically from what you see here, which is a very good thing. The transmission tunnel is higher and wider than before but everything else is neater and simpler, with a sculpted dash and consistent use of piano-black plastic and chrome-plated plastics. The stitched false leather won’t fool anyone but it doesn’t feel at all cheap, and all the touchpoints are reassuringly plush.

Toyota has also slimmed the A-pillars, dropped the scuttle and moved the side mirrors onto the doors to allow for quarter-light windows and for better visibility. Boot space is limited, mind. At 316 litres with the rear seat-backs in place (the 1.2 petrol and 1.8 hybrid have 361 litres) it’s at the smaller end of the class, and would struggle to take more than a few decent-sized duffle bags.

So the Corolla’s cabin doesn’t scream opulence but it betters a Focus for both character and quality, and is far from being shown up by more premium rivals. At the behest of owners, the Auris’s stubby gearshift has also been replaced by something more substantial. Pull it into D and the Corolla steps off the mark in almost total silence, the electric motor mounted within its transaxle taking the strain.

How does the Corolla perform on the road?

In the 2.0-litre model, both that motor and the car’s solitary gear are larger, allowing for electric-only cruising at speeds of up to 70mph, and the car’s regenerative braking potential is also greater. This first drive in rural Majorca is more a chance for us to explore the car’s dynamics, however. And straight away, the most surprising element is how naturally the Corolla steers, the low nose changing course with unexpected precision, and genuine feel through the thin, leather-clad rim.

An Eco mode ups the electrical assistance while Sport diminishes it, but the action is always linear and nicely damped. It sits at the sharp end of the class. As does this chassis, we’re pleased to report. On roads this smooth, there’s only so much you can learn about a car’s ride quality, though on this evidence the Corolla ought to do well back on the country roads around Burnaston in Derbyshire, where it is built.

What rough surfaces and potholes we do find are easily dealt with, and on its passive suspension set-up (adaptive dampers are an option), body movements are probably as closely controlled as Toyota dares permit without compromising pliancy. It’s a good balance – possibly a great one – and even better is the fact this new Corolla can be pleasingly mischievous. The front axle grips well enough for the tail to tidily slide wide if prompted. It’s doubtful an Auris driver would enjoy such a thing, but a Corolla owner? They might do.

As for the engine, it’s a known quantity – one capable of supreme refinement at a cruise but ultimately a blunt tool with which to cajole such an adept chassis. Toyota has suppressed the engine response to throttle inputs and put the initial burden onto this more powerful electric motor. In fairness, it’s a good trick, the single-speed transaxle now matching engine speed with acceleration more convincingly than ever, but the car still seems to flounder when you least need it to. Performance is probably as quick as the claims, though it never feels it, and the lack of control irks.

Where does the new Corolla sit versus its rivals?

Ultimately, this hybrid powertrain – in either form, but particularly in the case of the more powerful 2.0-litre version – is a double-edged sword. Real-world fuel economy may well prove class-leading when we test the Corolla more thoroughly, and if that is your priority, then the rolling refinement, interior ambience (clumsy infotainment notwithstanding) and affable handling all add up to something quite special.

But equally, such a confident chassis and some sharp styling deserve a much more engaging motor. If you love driving, the virtues above are unlikely to make up for lifeless brakes corrupted by regenerative duties and only modest performance meted out blandly. As a warm hatch to rival the likes of Ford’s Focus ST-Line X, the Toyota therefore falls short.

For now, let’s settle on four stars and recognise that the reborn Corolla offers its driver far more than the Auris ever did, and much more besides. And if ever Toyota decides this new hatch needs a halo model, I’m sure the good people at Gazoo Racing Meister of Nürburgring will happily oblige. 

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