Mazda is developing a diesel-electric hybrid engine, which will boast of a fuel economy rate of 2.5 l/100km, The Motor Report said citing The Yomiuri Shimbun.

The new engine is expected to be first fitted to Mazda2 and Mazda3, while Mazda6 and CX-5 SUV are also being considered for the same, the report said.

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The diesel-electric hybrid power plant is expected to reach Japan and Europe in 2016, the report added.