Well, it is possible. Automobile blogs in India have been abuzz with the news that there will be a diesel version of the Toyota Etios when the car is launched in India.
We could not verify this story. Toyota would not want to tell us rightaway even if they were planning to, so nothing really that we can do to tell you this is true or not. We also could not find who was the originator of this story, either.
Truth is, a diesel Toyota Etios would make sense. Of course it would. You don’t need us to tell you that. A diesel version of any car makes sense in India. We are totally in love with diesels. And if Toyota decides to launch the Etios with a diesel engine, it would be even more popular. It is Toyota – we trust them blindly anyway, and if they give us a diesel engine, we would happily plonk down the extra Rs 75,000 and buy that. No questions asked. Related story: Toyota Etios photo gallery

Honda has the same reputation and can do the same when they launch their small family sedan / hatchback too – the New Small concept. But sadly, the company has a major aversion to diesels, we think. It is blindingly obvious that diesels are the way to go for India – unless the introduction of Ultra Low Sulphur diesel ULSD changes things here.
Anything else we have to add? Nope. The Etios has a 2010-end launch date, and we hope, along with the rest of you, that there would be a diesel. Whenever any concrete information about the Etios diesel bubbles to the top, we will let you know.