Well it’s the big news of today anyway and I already put it on the AEU86 twitter, so why not place it here again:
Toyota and Subaru have announced that, due to the financial crisis, they postponed their joint development of a small FR coupe (also known as the successor of the Toyota Corolla AE86) till at least 2012 while the originial plan was they would start with building late 2011.

Reason for this can be sought in the shrinking market for cars in Japan. The market has been shrinking for years now due to reliability of cars, but it became worse because of the financial crisis.

My gut feeling is that it will probably be postponed till 2013, but of course this does not mean it will never meet the market at all. At least it should temper the expectations of the car since it was over-hyped anyway.

This is how the car probably would look like:
Toyota and Subaru AE86 successor postponed till 2012
Artist impression of what the small FR coupe should look like

Original source:

I found the news already copied here (in order of time):