Ford and PSA Peugeot Citroën are planning to expand production of the 1.4, 1.6 and 2.0 litre diesel engines made by the joint venture between the two companies.

The venture has delivered benefits from economies of scale and given both automakers a wide range of common-rail diesel engines for their respective model ranges. Between 2002 and 2004, more than four million engines were produced.

Demand is expected to soon outstrip supply so extra production capacity for the 1.4 and 1.6 litre diesel engines is being planned for Ford's purpose-built Dagenham Diesel Centre east of London from 2007 and for the two litre engine at Volvo's Skövde engine plant in Sweden from 2006.

This will create "employment opportunities" at Ford, according to a joint PSA/Ford statement, "while maintaining the corresponding high level of employment in the mechanical plants of PSA Peugeot Citroën". No specific employee numbers were provided.

The agreements signed by PSA and Ford in September 1998 cover a co-operative programme for the joint design and production of four families of common-rail, direct injection diesel engines: 1.4 and 1.6 litre engines; 2.0 litre engines; a 2.7 litre V6 engine; and a new family of engines for light commercial vehicle applications, details of which won't be announced until 2005.

PSA Peugeot Citroën led the engineering and production for the first two engine families while Ford led engineering and production for the V6 diesel engine and for the light commercial vehicle range.

The production expansion announcement marks the first time that manufacturing responsibility has been spread to both partners to accommodate the increasing demand for models using these engines.