Toyota rumoured to be building potent new hatchback: 2026 Toyota GR Starlet could be on the way to tackle Hyundai i20N and Ford Fiesta ST

Toyota is rumoured to be prepping another feisty little hot hatch.

According to reports from Japanese-based BestCar, Toyota is planning on reviving the discontinued Starlet hatchback as a rally-focused hot hatch to compete in the Rally 4 class against the Ford Fiesta, Renault Clio and Peugeot 208.

The Starlet was a tiny hatchback produced by Toyota between 1973 to 1999 and was sold in Australia between 1988 and 1999.

Toyota has a history with a wicked-up Starlet thanks to the spicy Starlet Turbo S variant.

The GR Starlet would sit underneath the current GR Yaris in the brand's performance line-up.

New information leaked to BestCar has revealed more in-depth information about the GR Starlet, including that it will be built on the narrow type-B platform used by the Yaris, with strut suspension on the front axle and a torsion beam at the rear, with the option of a more practical five-door body.

As the publication reported previously, a possible GR Starlet model is still speculated to have a 1.3-litre straight line three-cylinder turbo engine, a downsize from the 1.6-litre turbo that is used in the GR Yaris and GR Corolla.

It is expected to produce 110kW/220Nm for the road-going five-door version, while the rally-focused, three-door hot hatch version is expected to produce closer to 155kW.

Unlike the rest of the GR range, BestCar alleges the GR Starlet will only be available with front-wheel drive and a six-speed manual transmission to help keep the price down.

In Japan, pricing for the GR Starlet will start between ¥2.5 million ($25,900) and ¥2.6 million ($29,000), though it will certainly be more expensive should it ever arrive in Australia. For context, the GR Corolla is approximately $10,000 dearer in Australia than it is in Japan.

Dimensions are speculated to be 3850mm for length, 1725mm width, 1475mm tall, with a wheelbase of 1475mm. Weight is estimated to come in at under a tonne.

If the rumours are true, it would be the brand’s fifth GR-branded performance car in as many years (assuming it is announced next year), with the GR 86, GR Supra, GR Yaris and GR Corolla all having entered production since 2020.

The GR Starlet is tipped for a 2026 launch date, followed by an introduction into international rally competitions by 2027.

In addition to a new GR hatch, rumours have also been swirling around a possible rebirth of Toyota's iconic two-door 90's sports car, the Celica, with BestCar claiming that a 2.0-litre four-cylinder turbocharged hybrid model, capable of a 300kW output, could be in the pipeline.

It is also believed a production version of the S-FR concept, first released back in 2015 as a concept rival to Mazda MX-5, might not be far off either.

It is projected to sport a smaller 1.5-litre engine that is similarly paired with hybrid power.

Persistent rumours around Toyota's small sport car revolution comes as the brand teased two performance-based turbocharged four-cylinder inline engines currently under development – a 2.0-litre and 1.5-litre motors – back in July.

Toyota's CEO, Koji Sato, who appeared in a YouTube video discussing the engines alongside the CEOs of Mazda and Subaru, said at the time: "we want to refine Toyota’s new inline four-cylinder engines and develop them into powertrains to create diverse cars in this carbon-neutrality era."

It's a questionable move as most car brands begin exploring BEV performance vehicles instead, but Toyota has been reluctant to adopt fully electric power, instead opting for hybrid technology, which will undoubtedly play a key role in its future performance vehicles.