The first generation was a new design direction, emphasizing styling and comfort over practicality and economy. The Celica platform was used and attention was placed on handling and performance. Fog lamps were made standard August 1987. The 1S-ELU was replaced by the 2.0 L 3S-FELU, and May 1988, the 1S-iLU was replaced by the 1.8 L 4S-FiLU.
The restyled second generation was introduced 1989 and luxury equipment content increased. Four wheel steering appeared on the top level offering and styling was updated more closely resemble the Corona EXiV. Electronic fuel injection was made standard on all engines offered.
The four wheel drive system introduced on this generation was borrowed from the Celica GT-4. The 3S-GE engine as a result did not have four wheel steering. The trim level designations were 1800V, 2000X, 2000GT and 2000GT-4WD. As a result of styling changes, sales improved in comparison to the second generation. A driver side airbag appeared September 1995, as well as speed sensitive door locks and climate control air conditioning. A passenger side airbag appeared June 1996, along with anti lock brakes and a wiper on the rear window. Production ended due to economic conditions April 1998.