Replacing the Toyota Matrix in the 2009 model year (or, in other words, in 2008) will be the Toyota Blade.
Major changes are a stiffer new body structure, dramatic safety increases, lower noise from better aerodynamics, and addition of variable valve technology to the exhaust valves as well as the intake valves. The most visible change other than styling is likely to be the use of a 2.4 liter engine instead of the current 1.8 liter powerplant; already in use in Japan and in other Toyotas, including an upcoming Scion, the 2.4 liter engine produces 158 horsepower. All wheel drive will reportedly come back as an option.
As one might expect, the Blade will be modified for the American market. Sheet metal will be changed, engine and suspension tuning are likely to be altered, and the character of the vehicle might be adjusted to target the Mazda3.
Hybrid power is expected for the new Blade, going along with Toyota’s commitment to make a hybrid version of each vehicle, but it seems unlikely there would be a hybrid at launch.