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First of all, the Corolla is hardly an "also-ran," if we're to look at sales figures.That is what a successful company does: 'Know their customer, and what that customer wants, and look at profits, not the bleatings of a relatively-small group of ranting "enthusiasts."
From what I've read (regardless of this Edmunds review), the iM is not "a rebadged Corolla," but built on the Avensis platform (the same as the Toyota Auris and Scion tC), with an independent rear suspension. All-in-all, not a bad buy, considering its standard features, likely long-term reliability and low-cost maintenance (helped by good old port injection), but it IS a mistake for Toyota to suggest this car competes with the Mazda 3 and Golf (speaking as an enthusiast).