While European automakers have gone the engine downsizing and forced induction route for an entire generation of cars now, Asian automakers such as Toyota, Honda and Mazda have not fully embraced the idea yet.

The only Asian carmaker that has announced a small displacement downsized engine that I can remember in the past year is Nissan with their MR16DDT 1.6 litre and H4Jt 1.4 litre inline-4 turbocharged engines, and i suspect even that is because of Renault influence. Honda dabbled with a turbocharged 2.3 litre i-VTEC turbo 4-potter for the US market but they’ve not announced a new internal combustion engine in a very long time, which is a little disappointing for a car company who used to be known for their engines. Their last major announcement was AVTEC and then nothing!

But with the latest round of Euro emission standards coming around we are starting to see this change as Toyota have just announced that it intends to increase the Toyota fleet’s fuel efficiency via turbochargers and direct fuel injection in smaller vehicles. According to Toyota executive vice president in charge of R&D Takeshi Uchiyamada, turbochargers and direct injection will soon be a regular feature in the entire Toyota line-up, including bread and butter models like the Corolla and the Camry.

The new 1.33 litre 1NR-FE featured in cars like the Euro market Auris, Yaris, iQ could be a prime candidate to receive this technology. It’s Toyota’s newest 4 cylinder engine family and features Dual VVT-i and auto start-stop technology. The high compression ratio of 11.5:1 would have to be brought down to something like 9.5:1 to 10.5:1 of course.

From the normally aspirated 101hp and 132Nm at a lowish 3,800rpm, we could see it brought up to something like 130hp-150hp and 180Nm-200Nm to replace the bigger engines in the Corolla.

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Despite all the negative publicity brought about by all those massive recalls involving more than 11 million vehicles globally, as well as the corresponding sales drop in the US, the Toyota juggernaut continues to go about its merry way, at least financially.

The company’s second quarter profit for the year has jumped more than four times year-on-year, with the Japanese automaker reporting a profit of 98.7 billion yen (or US $1.2 billion) for the July-September period, up from the 21.8 billion yen (US $268 million) profit last year.

Toyota raised its profit forecast from an earlier 340 billion yen (US S4.2 billion) to 350 billion yen (US $4.3 billion) for the year ending March 2011. It lowered its sales forecast in the US, but revised its yearly worldwide vehicle sales forecast to 7.41 million vehicles, up from 7.38 million earlier, with the company expecting positive sales in Europe, Asia and Japan to offset the lowered numbers coming from the US.

In Japan, it continues to do well, as exemplified by the likes of the Prius hybrid, which again was the country’s best-selling car in October, the 18th straight month it has held the No 1 slot, this despite tumbling sales brought about by the expiration of government subsidies for eco-friendly vehicles in early September. A total of 21,769 Priuses were sold last month, 19.1% less than Oct last year, though the number was still good enough to keep it heads above Honda’s Fit, which was second on the list with 14,034 units sold.

Well, another recall to be had, this one from Toyota again. The Japanese automaker announced that it is recalling some 136,000 units of its Passo hatchback and iQ ultra-compact cars, with close to 65,000 vehicles in Japan and about nearly 71,000 cars in Europe being affected.

The recall is over a potential problem with a sensor on the power steering that may fail if the vehicle drives over humps, making the steering feel much heavier in use, though there are no reports of any accidents due to it. The affected vehicles were manufactured between October 2008 and October 2010, and the company says that the fix is a simple one involving an update to the software.

For the first time in a year, Toyota has reported a drop in its global production for the month of September, with a 1.3% decrease to 672,604 vehicles, the result of slow sales in Europe and reduced output in the United States.

The company’s production volume in Europe dropped by 29.7%, with ebbing sales in the UK and Turkey responsible for the slump. As for the United States, volume was down by just over 4%, the result of a reduced output after the company shut down its joint venture plant, New United Motor Manufacturing Inc in California, in April. Nummi is where new occupants Tesla Motors will be building its electric vehicles from.

That, of course, contrasts with the output growth enjoyed by Honda and Nissan, which are benefitting from a strong demand in China. Honda’s global production went up by 9.2% to 328,368 vehicles in September, the 10th straight month it has risen year-on-year. It said production in Japan jumped 21.9%, helped by demand for its Fit hybrid, which the company launched early this month.

Meanwhile, for the 20th straight month, Nissan’s production climbed 27.2% globally to 395,658 vehicles year-on-year, with volumes increasing in China and the United States. Elewhere, both Mazda and Mitsubishi also reported improved output percentages, Mazda by 9.4% percent to 117,413 vehicles and Mitsubishi by an impressive 30.9% to 114,191 vehicles.