Autocar rendering shows how the new MR2, influenced by the FT-SE, could look on the road
Mid-engined model primed with 2.0-litre engine that could offer as much as 600bhp

Toyota is poised to relaunch the MR2 and Celica as part of its transformation of the GR sporting arm into a full stand-alone performance brand.

The GR division is effectively Toyota's equivalent of BMW M or Mercedes-AMG and has its roots in the Gazoo Racing motorsport outfit that created Toyota's most recent crop of sports cars: the GR Yaris, GR Supra and GR 86. It is now being expanded and turned into its own brand, joining Lexus and the Japan-only Daihatsu and Century in Toyota's portfolio.

The new GR GT supercar and its racing GT3 sibling are the first models to be branded purely with GR badges. With the GR 86 and GR Supra now off sale and the GR Yaris set to follow suit before long, the supercars will be the only models in the GR range when they are launched next year.

But plans are fast progressing to expand the line-up at the bottom end and create a family of dedicated sports cars at a range of price points in a segment rivals are exiting en masse.

It's all part of a wider initiative to embrace more enthusiast-focused models under the guidance of company chairman and keen racer Akio Toyoda, who has long made clear his "no more boring cars" mantra and commitment to performance models - particularly those powered by combustion.

GR's new sports cars are being developed in parallel with Gazoo Racing's motorsport activities. The Celica is expected to be the basis for Toyota's next World Rally Championship challenger and the mid-engined MR2 is being developed in plain sight, with a development mule actively competing in one of Japan's biggest race series.

Tomoya Takahashi, president of Toyota's motorsport division, said the move indicates a shift in the company's mindset that places more emphasis on niche models that play a halo role, rather than one of particular commercial significance.

Speaking about the GR Yaris M concept being used to develop the MR2, he said: "In the 2000s, we had what was known as the 'global master plan' and Toyota had become a company that only built cars that made money. Since midship models don't sell in large numbers, they naturally fell by the wayside.

"If we were the old Toyota, I think the response to this project would have been: 'What are you talking about? Forget it!' But under chairman Akio Toyoda's presidency, the company came to embrace new challenges.

"In the past, a newly built car would never have been driven like this and I don't think you would have seen a vehicle at this stage of completion entered in a race, with 'Master Driver' Akio Toyoda behind the wheel testing it out.

"I hope our efforts here demonstrate that we are dedicated to continuing to make cars through motorsports."

MR2 to get punchy 2.0-litre engine

The reborn MR2 will be one of very few mid-engined sports cars on the market by the time it arrives - with the Lotus Emira now the only such model offered by a mainstream manufacturer.

Alpine says its next-generation A110 - another natural rival for a new Toyota sports coupé - could accommodate an engine if needed, but it will be launched as an EV.

The MR2 is expected to use a new 2.0-litre engine that Toyota is developing specifically for hybrid sports cars. The firm has been trialling its new 'G20E' four-cylinder engine in an adapted, mid-engined GR Yaris - going so far as to enter the prototype in Japan's Super Taikyu endurance race series as a hardcore test of its performance and reliability.

The G20E is based on the 1.6-litre unit that powers today's GR Yaris and is said to "push the limits of performance and efficiency". It has been designed to take up as little space as possible, to enable compact vehicle dimensions and a low centre of gravity - crucial attributes for a mid-engined sports car.

It is said to produce in the region of 400-450bhp in standard tune and upwards of 600bhp in the race car, making it potentially one of the most powerful four-cylinder engines yet created. Mercedes-AMG's 'M139' engine is the most powerful four-pot in a production car to date, making 416bhp in the A45 S hot hatch.

While the mid-engined GR Yaris M prototype is powered purely by petrol, the engine will be compatible with hybrid and PHEV powertrains, taking advantage of a shorter piston stroke than today's engine, which means it takes up less space.

Toyota moved the engine behind the cockpit in a bid to address the dynamic shortcomings of a front-engined performance car. It said: "Vehicles such as the GR Yaris have a front-mounted engine, concentrating the load on the front tyres during all driving operations of braking, steering and acceleration.

"In circuit environments, this significantly affects tyre wear and leads to a tendency for understeer when cornering at the limit due to reduced grip."

The mid-engined arrangement, devised and engineered in collaboration with chairman Toyoda, is said to address those issues while allowing "drivers to control [the car] exactly as they intend".

The M concept - named in reference to its mid-mounted engine and as a nod to 'Morizo', the name under which Toyoda races - drives both axles like the standard GR Yaris, but it is unknown if that would be the case for a small sports car using the same engine.

The original MR2's tail-happy handling was intrinsic to its dynamic character and a successor would be likely to follow suit - especially if it is to retain the name, which is often interpreted as meaning 'mid-engined, rear-wheel-drive two-seater'.

However, the drivetrain in the GR Yaris M is capable of splitting power equally across both axles, or channelling it all to the back. This could allow the MR2 to remain true to its roots while benefiting from the enhanced stability and poise of a 4WD set-up.

Toyota has trademarked the GR MR2 name and the new car is likely to go without Toyota badges entirely as the GR GT does - to cement the sporting brand's positioning as a stand-alone marque.

Testing of the eventual road car is thought to have ramped up recently with the deployment of a new sports car prototype at the Toyota-owned Fuji Motor Speedway.

Wearing a mish-mash of body parts from existing Toyota models - Lexus LC doors and GR Yaris lights among them - the two-door test mule is clearly mid-engined (based on its huge side air intakes and vented hood) and, in video taken from the side of the track, can be heard to emit a purposeful turbo four-pot soundtrack.

Even though it gives clues to the size and engineering of Toyota's new entry-level sports car, the test car is not thought to closely preview its styling. Instead, the new Emira rival is expected to be heavily based on the bold FT-SE concept Toyota revealed in 2023.

While it was originally destined to use an all-electric powertrain based around Toyota's new-generation energy-dense battery packs, the FT-SE was unmistakably 'mid-engined' in its proportions and could make production relatively unchanged by virtue of the new G20E engine's compact proportions.

Since the FT-SE was revealed, Toyota has doubled down on its commitment to a 'multi-pathway' energy strategy, investing in new petrol and hybrid powertrains, as well as hydrogen combustion, in parallel with the expansion of its EV line-up - and paving the way for a new generation of combustion-engined sports cars.

What the Yaris M test car tells us

Toyota is aiming to eradicate "prayer time" with its new mid-engined platform. That's what chairman Akio Toyoda calls the moment when a high-output front-engined car understeers into a sharp bend: "It's time to pray to God."

The firm touts the success of the standard GR Yaris in motorsport - having competed in the World Rally Championship, Super Taikyu and Nürburgring 24 Hours - but says characteristics inherent in its drivetrain layout ultimately limit its performance potential.

"The front-engine 4WD packaging means that all of the vehicle's functions - stopping, turning, accelerating - are concentrated around the front section," said Toyota. "This layout places a heavier load on the front tyres, which wear out more easily and must be replaced three times as often as the rear. Increased wear can also result in understeer."

Moving the engine to the middle of the chassis in the GR Yaris M concept helps to address these shortcomings - plus, said Toyota Gazoo Racing boss Tomoya Takahashi, it makes "cars that are fun for customers to drive".

He referenced the original MR2 as an example of a car with "incredibly well-balanced weight distribution between the front and rear" but acknowledged its notorious reputation for snap oversteer in fast bends. "What made the car turn so well also let it spin out easily on corners," he said.

However, by combining the mid-mounted engine with a four-wheel drive system, said Takahashi, "you transform the power that causes the vehicle to spin into a force that pulls the car forward, improving stability through corners".

He added: "When you get behind the wheel, we hope the first thing people notice is how well the car turns."

After taking to the wheel for a practice stint ahead of the car's competitive debut last year, Akio Toyoda was cautiously encouraged by the prototype's potential: "It's a fun drive, but there's still work to be done, isn't there?"

He added: "If I don't improve my driving skills, I won't be able to handle this car."