Revived Toyota Celica to offer hybrid power, rival Honda Prelude – report

The Toyota Celica is poised to return after more than 20 years with a hybrid powertrain aimed squarely at the recently launched Honda Prelude.

Toyota has yet to formally reveal the new generation of Celica, a two-door sports car last sold in Australia in 2005, but a Toyota North America executive confirmed in 2025 that work was under way on a model that could revive the nameplate for an eighth generation.

Since then, a camouflaged two-door prototype believed to preview Toyota’s next World Rally Championship (WRC) contender has been spotted testing ahead of its planned competition debut in 2027.

According to British outlet Autocar, the road-going Celica is tipped to use a 2.0-litre hybrid powertrain and all-wheel drive, while becoming the entry-level model for the Gazoo Racing (GR) performance sub-brand.

That would put it up against the Honda Prelude, which returned to the Australian lineup in 2026 after 25 years as a two-door hybrid coupe based on the Honda Civic.

The Prelude uses the standard Civic’s 135kW/315Nm hybrid powertrain but borrows components including its brakes and suspension from the flagship Civic Type R – itself a rival to the Toyota GR Corolla.

In Australia, the Prelude is offered in a single model grade priced at $65,000 drive-away.

According to Autocar, the Celica will follow a similar formula by using the underpinnings of the next-generation Toyota Corolla.

The new Corolla was previewed by a concept at the Tokyo motor show in October 2025 and is expected to be unveiled later this year ahead of a 2027 launch.

At the same show, Toyota chairman Akio Toyoda outlined five core brands under the broader Toyota group: ultra-luxury marque Century, premium brand Lexus, performance division GR, budget brand Daihatsu – which isn't sold in Australia – and Toyota itself.

Toyota revealed the flagship GR GT supercar two months later, powered by a 4.0-litre twin-turbo V8 hybrid powertrain. It'll be joined by the GR GT3 racing car, while Toyota Australia has told CarExpert it's keen to add the road-going GR GT to local showrooms.

The Celica is expected to sit at the bottom of the GR range, though it's unclear if it'll replace the current second-generation GR86, which entered production in 2021.

Twinned with the Subaru BRZ, the rear-wheel drive GR86 coupe uses a naturally aspirated 2.4-litre petrol four-cylinder engine, offers a manual transmission and is priced from $43,940 before on-road costs.

The Celica’s reported 2.0-litre four-cylinder turbo engine is the same unit being tested in the mid-engined GR Yaris M concept.

It's also tipped to power a separate mid-engined sports car that could revive the Toyota MR2 name.

Toyota’s 2027 WRC contender, meanwhile, is expected to use a development of the 1.6-litre three-cylinder turbo engine found in the current GR Yaris and GR Corolla.

Gazoo Racing marketing manager Mikio Hayashi told Autocar the smaller engine “cannot meet emissions, so we have to consider the possibility of a 2.0-litre” for the production Celica.

The Celica’s comeback would form part of Toyoda-san’s goal of reuniting Toyota’s “three brothers” – the Supra, MR2 and Celica.

Toyota revived the Supra in 2019, although the current fifth-generation model bowed out of production in March 2026.

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