Toyota Corolla Hybrid here mid-year

Toyota Australia will release a hybrid version of its top-selling Corolla around the middle of this year.

The surprise announcement comes just a month before the fourth-generation Prius arrives in Australia, where Toyota's hybrid leadership will face its first direct competition in the third quarter of this year in the form of Hyundai's all-new IONIQ.

Toyota has offered a hybrid Corolla in overseas markets since 2009, based on the previous generation, but this is the first time a petrol-electric version – based on the facelifted model launched in Australia in January 2015 – will be sold here.

Employing the same 1.8-litre petrol-electric powertrain as the outgoing MkIII Prius, Toyota says the Corolla Hybrid will consume  "around one-third less fuel while producing similar power to the already efficient petrol-only [103kW] Corolla hatch with its Multidrive S automatic transmission".

That means it will be more powerful but less efficient than the new Prius, which should come with a total system output of 72kW and fuel consumption of about 3.2L/100km.

The Corolla Hybrid hatch will be fitted with a Euro 5 emissions-compliant 73kW/142Nm 1.8-litre petrol engine mated to a 60kW electric motor, for a combined system output of 100kW.

Available only with a continuously variable automatic transmission (CVT), it will come close to matching the fuel consumption of the Prius MkIII (3.9L/100km), as well as its low CO2, NOx and particulate outputs.

Like the current Prius, a nickel-metal hydride battery back and selectable electric-vehicle mode will enable the Corolla hybrid hatch to be driven for up to 2km at speeds of up to around 45km/h with zero tailpipe emissions, depending on the level of battery charge and driving conditions.

To be available in a single specification grade, it will be the fifth hybrid model available from Toyota Australia, following the locally-made Camry Hybrid and the Prius, Prius c and Prius v.

Standard features will include satellite-navigation, Toyota Link connected mobility, dual-zone automatic air-conditioning and bi-LED headlights.

"The combination of Toyota's hybrid technology and Australia's best-selling car gives us a unique opportunity to broaden the market appeal of both," said Toyota Australia executive director sales and marketing, Tony Cramb.

"Corolla hybrid hatch will offer all the advantages of Australia's favourite car, coupled with the hybrid system's established performance, reliability, durability and exceptionally low running costs.

"This addition to the Corolla range will be fun to drive -- and fun to own with fuel economy and emissions that are superior to its direct competitors, especially diesel."

The Corolla Hybrid is Europe's top-selling hybrid vehicle in Europe, and accounts for more than half of all sales of the Auris, as the Corolla hatch is known there. Australia's best-selling hybrid vehicle is the Camry Hybrid, which found 5881 customers here last year.