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The Automotive News headline was disturbing. “Toyota may drop U.S. Tercel, Paseo,” said the newspaper, a Detroit-based industry trade journal.

Can’t be true, I thought, not unless Toyota has flipped its corporate wig.

So, I called Wade Hoyt and Antoinette Arianna, Toyota’s spokesfolks in the Northeast. Both said the Tercel would stay, which was good, because the current Tercel is so much better than the original.

The first Tercel, introduced in 1980, was a tiny, noisy thing powered by a 60-horsepower, four-cylinder engine — an automotive joke.

Subsequent Tercels weren’t much better. But in the mid-1990s, Toyota decided to get serious about turning the Tercel into a worthy subcompact automobile. The company succeeded, as evidenced by the 1997 Tercel CE sedan.

It is an excellent economy car. But anyone buying or leasing it must understand the term “economy.” It means nothing fancy. But it also means high quality at a relatively low price, which is what the current Tercel offers.

This little car is highway competitive. It’ll start right up in all kinds weather, and it’s actually kind of fun to drive. It deserves a reprieve, and here’s hoping that Hoyt and Arianna are right when they say that Toyota plans to give it one.

Background: The Tercel isn’t selling well. According to the latest figures from J.D. Power and Associates, a California-based marketing research firm, the Tercel’s U.S. sales fell 11.2 percent, to 14,741 cars, in the first half of this year, down from 16,591 sold in the same period in 1996.

Those aren’t happy numbers. And they’re especially unhappy for a car whose sales, even in good years, yielded skimpy profits for its manufacturer and dealers. From an earnings standpoint, if the Tercel were an elected official, voters would be circulating a recall petition.

But scrapping the car would be a big mistake for Toyota. Despite all of the bubbly national economic news, there are lots of folks who can’t afford to pay $15,000 or more for a new car. South Korean automakers understand this, which is why they’re increasing their U.S. shipments of Hyundai Accents and Elantras and Kia Sephias that have base prices below $12,000.

Detroit understands it, too, which is why General Motors Corp. continues to roll out its excellent little Chevrolet Cavalier at a base price starting at $10,980.

If Toyota gives up the Tercel, it gives up an important entry-buyer rung on the car sales ladder. This is the same mistake made by Detroit years ago that allowed the Japanese to gain a foothold in the United States in the first place.

The Tercel is too good and Toyota is too smart to make that error.

Particulars: The 1997 Tercel will roll into the 1998-model year with minor cosmetic changes — new interior fabrics and possibly, some new paints. That’s okay, especially if it helps to keep the car’s price at affordable levels.

The current Tercel is equipped with a 1.5-liter, twin-cam, in-line four-cylinde r engine rated93 horsepower at 5,400 rpm. Torque is rated 100 pound-feet at 4,400 rpm. It works.

A five-speed manual transmission is standard in the front-wheel-drive car. A three-speed automatic and an electronically controlled four-speed automatic are available.

Bigger, 14-inch tires — -compared with the 13-inch jobs of years past — give the Tercel better balance in turns. The suspension is decent –MacPherson struts with stabilizer bars up front; a trailing torsion beam with rear stabilizer bar in the rear.

Standard brakes are a work of convention, power-assisted front discs and rear drums.

There are dual front air bags, and seat belts and shoulder harnesses.

1997 Tercel CE Sedan

Complaint: Despite increased use of sound-insulation materials in the current Tercel, the car remains a bit noisy. But noise, unfortunately, is a part of the package of most small econocars.

Praise: An excellent little commuter. A common-sense buy.

Head-turningq otient: It’s like an old pair of tennis shoes — not particularly attractive, but awfully nice to have around.

Ride, acceleration and handling: A triumvirate of decency. Nothing to write home about in any of these categories; and for the normal driver, meaning one who doesn’t suffer delusions of race-track grandeur, nothing to complain about either. Good braking.

Mileage: With the tested, five-speed manual transmission, about 30 miles per gallon (11.9-gallon tank, estimated 350-mile range on usable volume of recommended regular unleaded), mostly highway and driver only with light cargo (trunk, 9.3 cubic feet).

Sound system: Four-speaker, AM/FM radio and cassette installed by Toyota. Decent.

Price: Base price on the 1997 Tercel CE sedan is $12,168. Dealer’s invoice on base model is $11,279. Price as tested is $13,945, including $1,357 in options and a $420 destination charge.

Purse-strings note: Excellent value for the dollar. Compare with any subcompact econocar on the market.