Toyota is considering producing diesel engines in India from around 2015 with an initial output of roughly 50,000 units a year, the Nikkei reported.
Local parts manufacturer Toyota Kirloskar Auto Parts likely would set up assembly lines, the paper said, adding the engines would be installed in the locally made Etios subcompact.
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Toyota initially released the Etios in India at the end of 2010, adding a diesel version the following year. Etios sales rose nearly 20% to around 74,000 units last year.
India provides subsidies for purchases of diesel fuel, contributing to the popularity of diesel vehicles there.
Toyota has roughly 5% of the Indian market.
It began assembling petrol engines in India last year but imports diesels from Japan. The weakness of the rupee against the yen has added costs to the Etios, hurting the vehicle’s profit margin.
