AS AUSTRALIAN CAR BUYERS gradually warm to the idea of diesel engines, and Peugeot, Citroen and Volvo forge ahead with their plans to bring diesel-electric hybrids to market, Toyota, the world’s current hybrid-car leader, has reportedly nixed the idea of an oil-burning hybrid.

Toyota currently produces a diesel hybrid truck for the Japanese market, but it says refining the engine to meet emissions standards for passenger cars would be too expensive an exercise to justify.

Instead, the Japanese automaker will be sticking to its petrol-electric guns and branching out into plug-in hybrids, rather than delving into the world of diesel-electric hybrids.

But is it the right tack to take? With diesel-powered cars like the MINI Cooper D consuming less fuel than many petrol-electric hybrids and Volvo set to debut its own ultra-thrifty plug-in diesel hybrid by 2012, is Toyota risking its well-established lead in alt-fuel technology by shunning diesel-electic power?

Time will tell, but with the demand for Toyota’s third-gen Prius at fever pitch and the company’s Camry Hybrid and Lexus hybrids selling up a storm around the world, it doesn’t look like the world’s largest single automaker is in any danger of giving up its crown just yet.