Reuters Newsagency quotes a Japanese industry newspaper as saying this would mark Toyota’s first locally produced hybrid car in Europe.
The Nikkan Jidosha Shimbun said that the Auris (Corolla Hatchback) was due for a full remodelling around 2012, and Toyota would offer a hybrid version for production and sale locally in Europe.
A spokeswoman said Toyota could not comment on future product plans.
Toyota Australia has previously said that it will be introduce a number of hybrid models over the next four years, and a Corolla hybrid would be likely to be amongst those introduced.
The Auris was Toyota's third-best-selling model in Europe during the first five months of this year after the Yaris and Aygo Light Car models.
Reuters says that days after taking the helm at the company founded by his grandfather, Toyota president Akio Toyoda said last month that the world's biggest carmaker would be more selective in utilising its resources, dropping a strategy of becoming a full-line maker in all regions.
One example of that was to focus on offering hybrid vehicles in Europe, Mr Toyoda said, implying that it may drop a plan it shelved earlier to cooperate with affiliate Isuzu to beef up its diesel line-up for Europe.
Toyota builds most of its hybrid vehicles in Japan, but also produces a small number of Prius cars in China and the Camry hybrid in the US state of Kentucky.
It has already announced plans to also begin production of the Camry Hybrid in Thailand and Australia, and the Prius in Mississippi.
Toyota has a goal of selling at least 1 million hybrid vehicles a year within the next few years and has said it would offer the hybrid option on all of its models by 2020.