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The Toyota Carina ED as a Japanese compact car created in 1985 as a companion to the 1984 Carina sedan. It was positioned as the 4-door Celica, with a similar focus on luxury found on the Corona EXiV. Its design sought to emulate the hardtop styling of large American sedans, resulting in a small, low cabin with longer front and rear ends. The ED's B-pillar stood up in the middle with no purpose other than to hinge the rear door on; it was not attached to the roof side of the cabin. The ED achieved huge sales in Japan, and other Japanese manufacturers introduced the Mazda Persona, Nissan Presea, and Mitsubishi Emeraude around the same time. "ED" is the initials of "Exciting" and "Dressy".

The Carina ED is the sister car, using the same platform as the Corona EXiV. The hardtop approach was also used on the yet smaller Corolla/Sprinter platform, called the Corolla Ceres and the Sprinter Marino; these cars were offered for consumers who wanted the luxurious approach offered by the Toyota Crown hardtop and sedan, as well as the Mark II (4-door sedan), Cresta (4-door hardtop) and Chaser (4-door hardtop and performance enhancements) but at a lower price and reduced tax liability based on the vehicles size and engine displacement. In Japan, the Carina ED was exclusive to Toyota Japan dealerships called Toyota Store locations.

1st Generation (1985-1989)

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.