TOKYO — If you've recently read a story or two about the delay, or even the demise, of the compact sport coupe that Toyota and Subaru are jointly working on, don't believe it. That's the message from knowledgeable PR sources in Japan, who tell Inside Line that this intriguing sports car program is still very much on track.

Last April, Toyota and Subaru confirmed they were working on a new compact, rear-wheel-drive sport-coupe project for 2011, the car the industry has since fondly come to know as the "Toyobaru."

To be built by Subaru and based off a new Subaru-developed platform (converted to rear-wheel drive), the sports car will also run with Subaru's prized boxer 2.0-liter engine. There will be both Toyota and Subaru versions of the car, each looking different but with the same normally aspirated flat-four engine under the hood.

Japan's influential Nikkei business newspaper ran a headline story in December, meantime, claiming that in the wake of the severe market meltdown, the Toyobaru was being postponed.

Toyota and Subaru had decided to delay the start of production, the paper claimed, with production now "likely to be postponed to 2012 or later."

Both representatives from Toyota and Subaru's press offices in Tokyo have recently denied the story. "The project is still on track, according to the info I have on hand," says a Toyota spokesperson.

What has changed is the production site. The original idea was for Subaru to build a completely new factory in Oizumi, in Japan's Gunma prefecture, to build the car. But the economic crisis has now prompted Subaru to can that project, so the Toyobaru, when it is built, will be made inside Subaru's long-serving Gunma main plant, which is now due to be refurbished.

TRAVERSE CITY, Michigan — Toyota Motor President Akio Toyoda, making his first public appearance in the U.S. since assuming the top job in June, confirmed that the company plans to launch an affordable sports car "in the next few years."

The so-called "Toyobaru" is a compact, rear-drive two-plus-two coupe that's being developed in partnership with Fuji Heavy Industries, the parent of Subaru and an affiliate of Toyota. Both Toyota and Subaru versions of the car are expected to be unveiled this fall at the 2009 Tokyo Auto Show.

Akio Toyoda, grandson of the founder, spoke about the sports car and about his vision for the company in a speech here at the annual Management Briefing Seminars sponsored by the Center for Automotive Research.

A self-described "car nut," he said, "I am passionate about driving and I race as well.... I want to see Toyota build cars that are fun and exciting to drive." Referring to the new sports car, Toyoda said, "I am very excited about it, and I plan to fast-track it."

October 6, 2009 - 12:30 am ET

TOKYO -- Toyota Motor Corp. goes sporty at this months' Tokyo Motor Show, unveiling its vision for a sport coupe being jointly developed with Subaru.

The Toyota-badged car, dubbed the FT-86 Concept, is the spiritual successor to the AE86 sport coupe of the 1980s, which was based on the Corolla. Like its boxy predecessor, the FT-86 Concept is compact, lightweight and has a low center of gravity.

But the styling is modernized with a rounded, sleek silhouette.

The FT-86 is Toyota's concept for a sporty coupe being undertaken with Fuji Heavy Industries Inc., the company that manufactures Subaru vehicles. While it is fitted with a 2.0-liter boxer engine from Subaru, the overall design was created by Toyota's ED2 styling studio in France. Even the blue-red metallic paint was specially developed by Toyota.

Sports cars have to be red, but we wanted a new red, said chief engineer Tetsuya Tada. So we came up with Shoujyouhi Red, the traditional red color of a Japanese monkey's backside.

Toyota and Fuji Heavy plan to start producing a sporty car in late 2011.

Toyota will be responsible for most of the engineering. Fuji Heavy will supply the horizontally opposed engine and manufacture the car at a Subaru plant.

The FT-86 seats four and has a front-engine, rear-drive layout. The boxer engine allows for a lower hood and gives the car a lower center of gravity.

Fuji Heavy won't comment on whether the FT-86 Concept is that car or not; Subaru won't be displaying a sports car at the Oct. 24-Nov. 4 Tokyo Motor Show. But the car clearly underscores new President Akio Toyoda's push for more muscular, fun-to-drive models.

Tada said Toyota wants the FT-86's sticker price to be in the $20,000 range. It won't sell if it's over 3 million yen ($30,000),he said. The price has to appeal to regular customers.

The car seats four and has a front-engine, rear-drive layout. The boxer engine allows for a lower hood and gives the FT-86 a lower center of gravity. Key to the design was maximizing fuel efficiency by reducing weight and creating a compact design, Tada said.

Tada also said it gets a dedicated chassis, noting that enthusiasts don't want a shared platform.