RALEIGH-DURHAM, NC – When the first-generation Toyota Matrix launched in 2002, it was a fresh-faced, utilitarian, reasonably priced small car with four doors and an upright stance, timed nicely to coincide with the arrival of slightly larger cross/utility vehicles.

The business case for the Matrix – derived from Toyota Motor Corp.’s high-volume Corolla platform – was clear at a time when Americans shopping for small cars had limited options.

The second-generation Matrix arrives with completely different dynamics at play.

Expensive gasoline is driving consumers to consider smaller vehicles. And while the new Matrix is improved, so are its competitors, namely the Mazda3 and Subaru Impreza, both of which arguably have more personality and better road manners.

But the real challenge confronting the new Matrix is the hordes of smaller hatchbacks that have arrived in the last two years, all of which are less expensive, dynamically competitive and in some cases nearly as spacious and functional.

Sales of the Honda Fit were up 99.6% through October in the emerging Lower Small car segment. The No.1 player in that sector is Toyota’s own Yaris, according to Ward's data.

While more stylish than the first-generation Matrix, the ’09 lacks the personality and handling characteristics of many of its competitors, more akin to a Corolla than a “hot hatch.”

For that reason, the Matrix might fall flat with 25- to 30-year-old males – the group Toyota marketers desperately want to lure behind the wheel.

But the ’09 Matrix likely will retain its customer base of young families, which is OK. It can comfortably seat two adults up front and three small kids in back, with ample cargo room.

Moms and dads might appreciate the new edgier look, as long as they don’t mind the grille resembling that of a large-mouth bass.

It comes available with all-wheel-drive, which had been discontinued on ’07 models.

The midrange Matrix S with AWD proved to be the best, most enjoyable package during a recent test drive. The standard powertrain is Toyota’s 2.4L 4-cyl. (which also powers the base Camry), mated to a 4-speed automatic transmission.

The I-4 produces 158 hp – a significant upgrade over the last-generation Matrix, which only offered a 126-hp 1.8L I-4. Still, the larger engine feels insufficient, perhaps due to the added weight (300 lbs. [136 kg] over an S with 5-speed manual) of the AWD system.

Toyota Matrix XRS
Vehicle type Front-engine
front-wheel drive 5-door hatchback
Engine 2.4L DOHC 4-cyl. with aluminum block, head
Power 158 hp @ 6,000 rpm
Torque 162 lb.-ft. (220 Nm) @ 4,000 rpm
Transmission 5-speed manual
Wheelbase 102.4 ins. (260 cm)
Overall length 173 ins. (439 cm)
Overall width 69.5 ins. (177 cm)
Overall height 61.4 ins. (156 cm)
Vehicle weight 3,140 lbs./1,424 kg
Top speed 100 mph
Base price range TBA
Est. EPA fuel economy (mpg) 21/28 (11.2/8.4 L/100 km)
Competition Pontiac Vibe, Mazda3, Subaru Impreza
Pros Cons
More fashionable than before But needs a boost in hp
All-wheel-drive But only with 4-speed auto?
Comfortable up front A little cramped in back

At the top of the lineup is the athletic XRS model, which had been scuttled from the current Matrix lineup for ’07.

The automatic-equipped XRS suffered from a touchy throttle and steering that felt heavy, as if the wheel were mounted in a vat of molasses, except during acceleration. The manual had a light clutch and a crisp but undistinguished gearbox.

Also available is a base Matrix, equipped with Toyota’s new 2ZR-FE 1.8L 4-cyl., making 132 hp and 128 lb.-ft. (174 Nm) of torque. The new, more compact 1.8L improves on the outgoing 1ZZ-FE 1.8L engine, with pistons that are 20% lighter and dual independent variable valve timing on both intake and exhaust cams.

Both the 2.4L and 1.8L engines are designed for basic transportation: Neither will win any drag races, but power is adequate for daily driving.

The Matrix interior is functional and comfortable, with reasonably supportive first-row seats. The front passenger seat folds flat and has a rubberized back to serve as a mobile office of sorts, accommodating a laptop.

Materials are of good quality for a compact, mass-market car that begins below $20,000.

But like other recent Toyota models, namely the Tundra fullsize pickup, the dash design lacks cohesion and suffers from too many textures and colors. Switchgear buttons, such as the side mirror controls, are dated and need to be retired from the Toyota portfolio.

The more severely raked C-pillar for Matrix version 2.0 encroaches on the headroom of rear-seat passengers. A half-inch (1.2 cm) is lost compared with the outgoing Matrix.

The ’09 Toyota Matrix goes on sale in the U.S. in February.