The eighth generation, which shared its platform (and doors, on some models) with its predecessor, was introduced in May 1995. Due to a recession, Toyota ordered that Corolla development chief Takayasu Honda cut costs, hence the carryover engineering.

For the general market, the Corolla was offered in Base, XLi, GLi, and SE-G trim levels.

Japan (1995-2000)
This marked the beginning of the end of the Sprinter. The Sprinter Trueno coupe range was carried over with a facelift, while the wagon was identical to the Corolla.

Japanese models received minor changes in April 1997 with new nose, tail, and interior. The rear panel is totally different, therefore the trunk and tail lights are not interchangeable between the old and facelift models. The new Japanese rear panel is the same as the European model.

Japanese Engines:

4A-GE ・1.6 L (1587 cc) I4, 20-valve DOHC, FI, 165 hp (123 kW)
4A-FE ・1.6 L (1587 cc) I4, 16-valve DOHC, FI, 115 hp (86 kW)
5A-FE ・1.5 L (1498 cc) I4, 16-valve DOHC, FI, 100 hp (75 kW)
4E-FE ・1.3 L (1331 cc) I4, 16-valve DOHC, FI, 88 hp (66 kW)
3C-E 　・2.2 L (2184 cc) I4, diesel, Electronic Fuel Injection, 79 hp (59 kW)
2C-III ・2.0 L (1974 cc) I4, diesel, FI, 73 hp (54 kW)
JPN-market chassis:

E-111 ・Sedan SE-G, S-Cruise, GT
E-110 ・Sedan LX, XE, SE Limited
E-114 ・AWD sedan
E-115 ・AWD Wagon Carib