Following a period of indecision, Toyota is expected soon to increase the number of passenger car models it sells in Brazil, adding a compact-medium hatchback similar to those already marketed in Europe (Auris) or the US (Matrix).

The company could have made its decision when the current generation Corolla was launched two years ago, forcing it to phase out the Fielder station wagon for which there was no successor.

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The station wagon market in Brazil, in fact, is very small and there are few contenders. Buyers have migrated to monobox models (like the Citroen Picasso) and SUVs.

Toyota sources told just-auto refurbishing the assembly line would require six months but would not comment on whether the automaker would import the body components or stamp them locally.

Almost nothing would be carried over from the Corolla sedan – not even doors. Studies have shown that the hatchback in this segment should sell at least 3,000 units per month to justify local production – importing would not mean competitive prices due to 35% duty.

The company has just launched a new two-litre flexible-fuel engine and a new automatic transmission for a new top version of the Corolla called Altis.

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The new powerplant is a benchmark among similar displacement cars and delivers 153hp on our E100 ethanol brew, 11hp more than the same engine running on petrol.

Increasing production in Indaiatuba, 60 miles northwest of São Paulo City, might be a reflex reaction to the troubles in the US, Toyota’s most profitable market.

The company decided to move faster where it is already present and its prestige has not been hurt, despite some local reports of unintended acceleration by Brazilian-made Corollas.

Toyota has confirmed that the accelerator pedal unit of models sold here is the same as those produced in Japan, where there was no recall. It blamed the local problem on poorly attached floor mats.