Toyota is unlikely to engineer a successor to its small-capacity 1.4 diesel for the next-generation Corolla. The current 1.4 D4D engine is getting a bit long in the tooth and the cost and complication associated with an all-new small capacity diesel engine are exorbitant. Small-capacity diesels are also notoriously difficult to get right and normally need plenty of high-tech engineering to make them future-proof, especially as far as emission norms are concerned.
What makes the case even worse for diesel is the fact that a Euro or Bharat Stage VI diesel may turn out to be significantly more expensive than a similarly powerful petrol hybrid powertrain. And the kicker is that the hybrid is likely to be just as efficient as well.
So, Toyota is seriously considering dropping the diesel from the new Corolla altogether. Demand for small diesels cars is down in Europe, while in India it is facing increasing resistance, and with hybrids getting better, we could see the demand shift away from diesels altogether.