The diesel engine will continue to remain relevant for select segments, said Sabari Manohar, group head – customer service, Toyota Kirloskar Motor. The statement comes in response to a specific question about the future of diesel in India. He also indicated customer preference for diesel remains visible in larger SUVs such as the Fortuner. “There are hardcore fans for diesel,” he remarked, adding, “Diesel is diesel.”
- Toyota 2.8-litre diesel engine to continue past 2027
- Toyota would object to abrupt exits from established powertrains
Toyota diesel plans in India
Toyota Innova Crysta to be discontinued in 2027.
Demand for diesel-powered SUVs and MPVs has not disappeared, even as electrification gathers pace, notes Toyota. The demand is shaped by customer usage patterns and segment-specific requirements. “There are segments like Crysta, where it’s a purely diesel segment,” Manohar said, while noting that tighter regulations in regions such as the NCR have created constraints in some markets. “It depends on the segment,” he added and pointed out the divergent demand signals Toyota is seeing across the country.
However, come 2027 and the introduction of CAFE (Corporate Average Fuel Efficiency) 3 norms, Toyota will discontinue the Innova Crysta. In fact, the ladder-frame diesel MPV was originally meant to exit closer to 2025, but sustained demand and semiconductor constraints on the Innova Hycross prompted Toyota to keep the Crysta in production longer than planned.
This means that Toyota will effectively discontinue the 2.4-litre four-cylinder diesel engine and just have the larger 2.8-litre unit, which does duty in the Fortuner and Hilux. To better meet the upcoming emission norms, the brand has already brought out the Fortuner mild-hybrid and will increasingly push its hybrid portfolio (i.e., the Innova Hycross), which benefits from ‘super credits’ that make it easier to meet the tougher CO2 targets under CAFE 3.
Diesel demand in India
Overall diesel sales increased marginally in 2025
It should be noted that the diesel cars’ share in passenger vehicle sales rose marginally from 17.93 percent in 2024 to 18.33 percent in 2025. The increase was primarily driven by demand for midsize SUVs such as the Hyundai Creta and premium SUVs like the Toyota Fortuner. Manohar indicated that customer preference for diesel is clear in larger SUVs such as the Fortuner, where buyers typically prioritise torque, long-distance drivability and rugged performance.
He also believes that diesel adoption is unlikely to decline uniformly or abruptly nationwide as demand signals remain fragmented across regions and use cases. “At this point in time, we have good demand for hybrids, good demand for ICE, and we hope to create a good demand for EVs as well,” he said, adding that the pace of change will depend on regulatory clarity. “We need to see how the whole policy direction changes,” Manohar said and emphasised Toyota’s preference for a calibrated transition rather than abrupt exits from established powertrains.
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