Whilst it has already been revealed that the two brands are collaborating to produce a budget sports model, latest reports reveal each manufacturer will have its own variation on the design.
The final design is due to be approved by July, with production set for 2010. At the moment the only insight into what it could look like is provided in this purportedly official sketch.
The car's design brief is simple, light weight, rear drive, powerful and most importantly - cheap.
Both marques will utilise Subaru's 2.0-litre boxer engine, developing at least 130kW in naturally aspirated guise, with the potential for a flagship turbocharged model at a later date.
Reinvigorating the soul of the AE86 Sprinter, the new model will be derived from a smaller and lighter Impreza chassis, minus Subaru's trademark all-wheel drive system.
However reports speculate that pending success of the new model it could lead to the rebirth of a modern Toyota Celica GT4, with Subaru's 2.5-litre turbo boxer and all-wheel drive.
Price? Best estimates put the new model on Japanese roads for as little as AUD$21,200.
A drop top edition could also serve as Toyota's answer to the Mazda MX-5.