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The North American Corolla (E140) was unveiled on October 31, 2007, at the SEMA show in Las Vegas. Only the sedan is sold, although the second-generation Corolla Matrix (commonly referred to as just “Matrix”), which shares the E140 platform and engines, is considered the Corolla’s hatchback/sport wagon counterpart.

The new Corolla has been described as a 7/8ths Camry, also having styling commonality with its little brother, the Yaris. It has been criticized for its sluggish steering and handling, and for its inexpensive interior materials which seem a step back from the previous generation. Reviewers note that the Corolla represents a gradual evolution over the previous iteration, without straying too far from the formula as a plain but reliable, fuel-efficient, simple and inexpensive form of transportation.

The Corolla became available in US dealerships on January 31, 2008, as a 2009 model. A total of 5 trim grades (Standard, S, LE, XLE, and XRS) are being offered in the US, Canada has 4 trims (CE, LE, Sport (or S), and XRS). The LE and S have a similar MSRP and are very similar mechanically, the main differences being the S’s spoiler, underskirts, and silver interior highlights. The XRS also has a spoiler and underskirts like the S, but it has a larger 2.4 L engine, rear disc brakes, a sport-tuned suspension, and standard stability and traction control.

The base (standard and CE) and S trims are available with either a five-speed manual or four-speed automatic transmission, while the LE (unlike the previous generation) and XLE are automatic only. The XRS grade is equipped with the 2.4-liter 2AZ-FE I4 engine, the same one used in the Camry, good for 158 hp (118 kW) and 162 ft·lbf (220 N·m) of torque, with a choice of five-speed manual or five-speed automatic transmissions The XRS takes 7.9 seconds to 60 mph and 16.0 seconds for the quarter mile. All other trims have Toyota’s new 1.8-liter 2ZR-FE four-cylinder engine with 132 horsepower (98 kW) and 128 pound-feet of torque. Corollas with the 1.8-liter engine have an EPA fuel economy rating of 27 mpg city/35 mpg highway, both numbers being lower than those achieved by the previous generation. The 2.4-liter is rated at 22 mpg/30 mpg with the automatic and 22 mpg/29 mpg with the manual. All engines are ULEV II certified. Toyota carried over the 13.2 gal fuel tank from earlier models. In order to help improve fuel economy the new Corolla uses an electric power steering unit instead of a belt driven hydraulic pump.

The Corolla offers technological conveniences such as an auxiliary audio jack for MP3 players, upgraded JBL audio, tilt/telescopic steering wheel, steering wheel-mounted audio controls, and a hands-free Bluetooth mobile phone system. Traction control and Vehicle Stability Control (VSC) are standard on the top-of-the-line XRS, and are available as options on the American LE and XLE models.

In 2009 (2010 US model year), S models received the Optitron XRS gauges as standard equipment and new 16 inch steel wheel cover designs. XLE models received optional automatic climate control and a metallic finish to the steering wheel panels. All models now have Electronic Stability Control as standard equipment.

In Mexico the Corolla is offered in 3 trim levels: LE which comes standard with 16-inch steel wheels and wheel covers and with both manual and automatic transmission, then the mid-range XLE now comes with 16-inch alloy wheels and wood inserts in the interior and it is only available with an automatic transmission, and the XRS that is basically the same as the XLE only that the manual transmission is available as an option again and the wood inserts are gone and the front and rear under body spoilers, sport side rocker panel moldings are standard. The Mexican spec Corolla is built at the Cambridge plant in Ontario. Mexico is the only country outside the US and Canada to receive the Corolla from this assembly plant. Also, as of the 2010 model year, fog lamps became standard from the mid-range XLE onwards.