What's New?
The all-wheel-drive (AWD) and 170-hp XRS versions have been dropped; otherwise, the Matrix is unchanged for 2006.

Overview
The Matrix was one of the first small hatchback/sport utility vehicle (SUV) crossovers when it was introduced in 2002. Developed in conjunction with General Motors, the Matrix is based on the Toyota Corolla compact sedan and is mechanically identical to the Pontiac Vibe, though while the Vibe is built in California, the Matrix hails from Canada. As with the Vibe, the Matrix lineup has been clipped for 2007. The high-performance XRS and AWD versions are gone, leaving just the 126-hp front-wheel-drive Matrix in standard and XR form.

The Matrix is powered by the Corolla's 1.8-liter 4-cylinder engine, connected to either a 5-speed manual or 4-speed automatic; its 122 lb.-ft. of torque peaks at 4,200 rpm, but the engine is designed to deliver 90 percent or more of its torque between 2,000 and 6,000 rpm to aid drivability. The Matrix offers more load-lugging space than the typical compact sedan, while achieving similar fuel economy. The Matrix has roomy, tall seats and a 5-passenger capacity. Rear seats and the front passenger seat fold flat to increase cargo room, and the trunk has a hard floor made of washable plastic. As with many SUVs, the rear window opens separately from the rear hatch.

Air conditioning, a CD player, and a height-adjustable passenger seat are included on the base Matrix model, while the XR adds power windows, locks, and mirrors; remote keyless entry; and a rear wiper. Front-seat-mounted side air bags, two-row side curtain air bags, anti-lock brakes, and electronic stability control are all optional safety items, though the latter is available only in conjunction with an automatic transmission. As with other Toyotas, the Matrix is covered by a 3-year/36,000-mile warranty with 5-year/60,000-mile powertrain coverage.

The Competition
The Toyota Matrix competes in the Compact Conventional segment, which consists of 20 models. Buyers in this segment look for fuel economy, reliability, and safety, according to the J.D. Power and Associates 2006 Avoider Study^SM and the Escaped Shopper Study.^SM

The top sellers in the segment during calendar year 2006, according to the J.D. Power and Associates Sales Report,^SM were the Toyota Corolla (328,699 units sold), Honda Civic (316,638), and Chevrolet Cobalt (211,449). The Toyota Matrix sold 58,689 units in 2006, an increase of 2.6 percent compared to the previous year. Other models offered in the Compact Conventional segment include the Ford Focus, Nissan Sentra, Toyota Prius, Volkswagen Jetta, and Saturn Ion. Joining the segment in 2007 are the Pontiac G5, Suzuki SX4, and Volkswagen Rabbit.