It has been a year full of unlikely and hugely unwelcome events. Into all of this has been thrust a few shining lights – a hilarious US election, the new iPhone, and a rally car for the road from Toyota. Wait, what?

Yep. Toyota’s all-new, excellent-but-expensive Yaris has an evil twin, one that instead of being sent to a posh finishing school did its work experience in a skunkworks mechanic’s workshop. Shorn of pretty much everything that makes it a Yaris – except the headlights, taillights and mirrors – the Yaris GR (Gazoo Racing) joins the smash-hit Supra GR as Toyota pours more petrol on the fire restarted almost a decade ago by the 86.

HOW MUCH DOES IT COST?

This is a question with more than one answer and currently that answer is “if you can get one, it’s whatever you have to pay.” The first thousand went for a startling $39,990 in a matter of days. Hours, really. A further hundred for a few grand more and there are apparently more on the way for $49,500. Maybe. Who knows. It’s all part of the Yaris GR story. I was convinced it was going to be at least $55,000 so it’s come up alright.

WHAT DOES IT COST TO OWN?

Astonishingly for a bananas car like this, it’s all very normal. Along with the standard five-year/unlimited kilometre warranty (seven on the drivetrain if you service with Toyota), you get capped-price servicing for just $205 per service. Which comes every 12 months/15,000km. The program covers five services.

That’s super-impressive if you ask me. The far less powerful Fiesta ST costs $299 per service,

WHAT’S THE EXTERIOR LIKE?

It’s a Yaris, but not as we know it. As I’ve already mentioned, there is almost nothing left of the recently-released small hatch. As the GR is a homologation special for the World Rally Championship, engineers got a list of requirements from the Toyota WRC head Tommi Makkinen. That meant flinging all of the panels. The new bonnet doors and tailgate are made of lightweight aluminium and the roof of lighter weighted carbon fibre, the sort of thing you find on the BMW M4.

Toyota and Australian Rally Championship partner Neal Bates Motorsport thoughtfully brought along doors and roofs from a standard and GR Yaris to compare the weights – the frameless doors from the GR are significantly lighter and the roof weighs almost nothing compared to the steel one.

Big Enkei wheels set the car apart, too, along with various aero bits and pieces. I say various aero bits and pieces, but it’s a whole car’s worth, with a chunky new front bumper, pumped guards and a downward slope on the roof to the tailgate to feed the WRC wing. When it has one.

WHAT’S THE INTERIOR LIKE?

There is a lot more recognisably Yaris inside the car, which is to be expected. The new interior is a massive leap over the old Yaris and for the GR the design team added a set of racy seats that are possibly slightly too big to fit, so they sit higher than one might expect. I’m only 180cm and particularly in the passenger seat, I was sitting fairly high in the car.

Obviously given it’s a three-door, getting in the back is a bit of a pain and you can tell it wasn’t a priority for the team. The seats are really only for occasional trips and are really better suited to holding things. .

WHAT’S THE INFOTAINMENT LIKE?

The same 7.0-inch screen found in just about every Toyota I can think of that isn’t a Kluger is along for the ride with the same ho-hum software (which itself is a massive improvement over the old system found in C-HRs and Corollas past). It has eight JBL-branded speakers, sat nav, DAB radio, Apple CarPlay and Android Auto (both via the single USB port) as well as Waze and Stitcher (iOS) and WebEx (Android) via the MyTotyota app setup.

It all works fine but I do think Toyota could put some more effort into a system that can’t be replaced easily. The 86’s double-DIN head unit is fine if you install a cheap nasty system, less so when you’re hard-wired like the newer system.

WHAT IS THE STORAGE LIKE?

The boot is laughably small, at just 141 litres, but that’s the price you pay for its highly-specialised nature. You’ll be fine, the back seat is hardly going to play host to people all that often. Fold them down and you have space for four wheels and tyres for any track-day shenanigans you want to get involved with, which echoes the 86’s storage options.

WHAT ENGINES ARE AVAILABLE?

The Yaris GR comes with just one engine, but you won’t mind too much. A 1.6-litre three-cylinder turbo, it packs 200kW at 6500rpm and 370Nm of torque from 3000-4600rpm.

It’s an all-wheel-drive rally weapon, with a six-speed manual only and will streak to 100km/h in 5.2 seconds.

The all-wheel-drive system is called GR-Four, a nice nod to the Celica GT-Four badge from the late nineties. Interesting oily bits include an electronically-controlled rear diff, with the torque split front to rear handled by a multi-plate clutch pack in lieu of a centre diff. That’s useful to know because unlike a lot of small all-wheel drive cars, up to seventy percent of power can go to the rear wheels (in sport mode) meaning that you can get up to no good on a track. Technically it can send 100 per cent of power to the rear wheels and I’m certain some clever clogs will work out how to do that because they don’t care too much about their warranty.

WHAT ABOUT FUEL ECONOMY?

Toyota says it will achieve 7.6L/100km on the combined cycle. With stop-start and a light right foot, yeah, maybe. It’s not out of the bounds of possibility but it’s exceedingly unlikely you’re going to see it for reasons that will shortly become obvious.

WHY DID TOYOTA MAKE THE GR YARIS?

The GR Yaris is meant to be this way – it’s what the motorsport rule-makers call a homologation special, where a manufacturer must sell a certain amount of the “donor” car to qualify it to run in the FIA World Rally Championship. Certain bits have to be the same on the race car and the road car (in this case doors and tailgate, both hugely lighter than the standard car’s) and of course the engine has to be right. Toyota worked very hard with the FIA to be able to run the GR’s three-cylinder engine.

The company’s president, Akio Toyoda, spent a lot of time on this car which meant it was going to be made no matter what. Which is great, because after all that hard to make the car fit the rules, COVID struck. Like Formula 1, the FIA threw WRC teams and manufacturers a lifeline, saying the current rules will go for another year before switching to a completely different set of rules.

Even without COVID, a car like the GR Yaris could only be possible for a massive company like Toyota, with deep pockets and, as it happens, a car guy in charge. Few other manufacturers could charge so little for such a capable, clever and relatively low volume car. More than once have I wondered out loud if Toyota is making any money on the first 1000 cars they sold here. I don’t think so. The GR Yaris – or to give it the full regal title, the Gazoo Racing Yaris – is now all about building the new GR brand to compete with N and N-Line from Hyundai and spawn everything from mad hypercars to body-kitted and firmed-up C-HRs.

WHAT’S IT LIKE TO DRIVE?

This is exactly nothing like the standard Yaris. I drove two of those cars a few weeks ago…or was it months…and found them to be vastly better than the car they replaced which, to be fair, wasn’t especially difficult. But like other TNGA-based Toyotas, the new Yaris is nice to drive, quiet and well-mannered.

Thing is, when you break a car in two, bolt on a different rear end with completely different suspension, throw in a firecracker of an engine and a trick all-wheel-drive system, you’d want it to be quite different.

We started our drive pottering about the streets of the national capital, with even thinner traffic than usual owing to work from homers doing just that. It’s pretty good around town, which I wasn’t really expecting. The clutch isn’t hard work and the engine’s big turbo takes a while to get up to boost so you’re not managing a lot of torque.

So it’s fine around town, even though it’s manual, which doesn’t bother me but might bother some.

The twisty bits are what this car is built for. Turning the dial to Sport rearranges where the power is going, with a default power split of 70 per cent ot the rear, making it a lot of fun into and out of corners. I’m not going to pretend I was overjoyed when I saw the Dunlop Sport Maxx tyres on the Enkei wheels and they take a bit of getting used to. Most of its sort-of competitors run the superior Michelin Pilot Sport 4S tyres and the forthcoming Rallye also scores Michelin rubber, so if you love your driving, you know what to do.

What also takes getting used to is the way you have to really work the gearbox to keep the turbo spun up. On a closed road loop at a specialist driver training facility, there were two corners where I was caught off-boost, meaning that I had to step on the throttle a bit early.

Are either of these big problems?

Heck no. This car is brilliant. Any performance car you care to name has a quirk or two you need to learn. Toyota has punched out an instant modern classic to rival the gold standard of hot hatches, the Peugeot 205 GTI.

When driven the way you’re supposed to, the depth of engineering is immediately obvious.

The GR Yaris goes without tricksy adaptive damping to still deliver a ride that works around town as well as while blatting down to second into a bumpy hairpin. The all-wheel drive system is completely unobtrusive, shuffling the power about as required. Its efficiency was made abundantly clear on a skidpan where I was encouraged to drive very unsympathetically with the aid of the handbrake. The car would cheerfully fly into a very controllable slide before bringing it all under control.

The front brakes are huge, 356mm discs with four-pot calipers. Stomping on these bad boys threatens to drag your eyes out of their sockets. The 225/40 Dunlop tyres are up to the job most of the time, too, but super-keen drivers will probably want a tyre with a stiffer sidewall. Thankfully, that is very quickly and easily fixed.

That three-cylinder engine, though – wow. With a distinctly Porsche sound from the exhaust, once you’re over the turbo lag it delivers a powerful, torquey punch. The gearbox could be a little slicker, but it does have a lot to deal with.

The only downside to the weight-loss regime and the various bits of clever driveline technology is that the GR Yaris is pretty noisy on the road, with lots of tyre noise invading the cabin. The JBL system does its best to drown it all out, but yeah. Again, will owners care? Not one jot.

HOW SAFE IS THE YARIS?

Toyota won’t be offering the GR for an ANCAP rating. As there’s not much left of the standard Yaris it would need a re-test for its own star set.

There are six airbags, the usual stability and traction controls, lane keep assist, reversing camera, lane tracing, forward collision warning, lane departure warning, speed sign recognition, daytime intersection assist (helps to stop you turning right into oncoming traffic) and emergency steering assist.

The forward AEB can spot pedestrians day or night while the cyclist detection works during the day.

There are two ISOFIX and points in the rear seats too.

Where it differs most from the standard car is the exclusion of the centre airbag in the front to stop heads clashing.

WHAT ARE THE ALTERNATIVES?

Er, well…nothing directly. At around the same price is the usual gaggle of bigger hot hatches from Volkswagen, Ford and Hyundai and they’re nothing like the GR Yaris. Nothing at all. And that’s because this car is a real throwback to a time people of a certain age really enjoyed, the wonderful years of Group A homologation World Rally Championship cars that gave us the Celica GT-Four, the WRX and the legendary Lancer Evolution series.

THE BOTTOM LINE

President Akio Toyoda should get involved in more fast car projects because this a wonderfully tactile delight from a company that has spent twenty years expunging that sort of fun from its engineering department. The 86 is mostly from partner Subaru and the heavy lifting on the GR Supra was done in Munich.

This is a from-scratch job by Toyota and it shows that even after two decades, the Japanese giant can do something completely loopy. Not only is it loopy, it is preposterously good, nailing all of the hot hatch KPIs and then saying, “Nope, let’s do better.” We’re in another golden age of hot hatches, but this one might just be the king.