And Toyota makes a ton of diesel engines in their Thailand plant. This seems to be limited to some European models in order to meet the euro standards. These are specific cases and not some worldwide thing.
The intent here was that Toyota cannot build a diesel engine. Hino has no trouble makings them as well as the Thailand plant I mentioned. There may be other facilities as well.
The biggest passenger diesel market is in Europe, by far. Toyota wanted to jump in that 20 some years ago, same like other Asian companies. Hyundai was smarter, they immediately went to Mercedes for help, although their engines ended up being far from being competitive in efficiency. Honda had decent diesel, nothing special and Subaru pushed boxer diesel, which was blah.
Toyota problems were :
1. Their 2.2d was literally disintegrating before 100k km.
2. Their CR pumps had huge issues. I was part of testing program with them in 2004 to determine which fuel suppliers will be listed in the manuals, for all their diesels, 1.4 to 3.0. Take into consideration that no other manufacturer had fuel related issues at that time.
3. Their DPF accessories had also big problems.
That all led to scrapping their small diesel engine program and just relying on BMW. They were FAR behind curve which would require insane amount of investment to try to catch up.
Diesel engines you are referring, and I have plenty experience with them when I worked in NATO and OSCE are seriously old technology and with that, seriously reliable. But not as reliable like Mercedes 5cyl diesels or 2.4 from VW.
Their V8 diesel is interesting proposition. But only reason why it is V8 is that they can’t achieve performance with their inline 6, it would require too much investment for very small market, and BMW inline 6 diesel, is far too expensive.