The VW 1.6 diesel should be cheap enough to built as they sell zillions of them and have done for some time...assuming that, like the 2.0, they could get bit through NA emissions without having to add too much stuff to it.
The 1.6L Diesel wouldn't ever be cheap enough in North America - add on the emissions requirements and it just isn't economical. Here's why, using examples (i.e. made-up numbers) - assume the following:
-2.0L I4 gasoline costs $1000 to build.
-2.5L I5 gasoline costs $1500
-1.4T Hybrid costs $2000
-1.6L Diesel costs $1050
Anywhere there is an added cost, no matter how little that cost may be, which VW is not willing to bear, pushes that cost directly to the consumer...and what's worse, they will have a mark up on it as optional equipment. So to think that they'll offer the 2.0L gas4 or the 1.6L diesel for the same money is absurd because they'd make less on the diesel.
The point is that the 1.6L would not be the base engine because 1) it's a diesel (new tech - can sell it for more), 2) it costs more to build.
I don't think the 1.6 would garner as much attention as you'd like it to unless it became the new base engine without increasing the cost of the car. Not to mention that these tiny diesels don't exactly perform well with automatic transmissions, which are found in what, 90-95% of Canadian car sales? The only figure I can find in the 20 seconds of googling for the uptake of manual transmissions is 6.7% in 2010 in the US. Sad, but true.
