Ford Australia on Friday said it would build its first-ever four cylinder Falcon and had axed plans to make the next generation Focus at its plant near Melbourne.

The company is investing A$230m to improve the fuel efficiency and environmental impact of its Australian-made models, and the locally designed and developed Falcon will be the first rear-drive Ford to get the two-litre I4 ‘EcoBoost’ engine.

EcoBoost, already rolled out in the US, uses petrol turbocharged direct injection technology to improve fuel efficiency and reduce emissions compared with larger displacement engines. Ford claims up to 20% better fuel economy and 15% less CO2 emissions.

Ford Australia is also going to offer a factory LPG system for the Falcon (aftermarket conversions are common ‘down under’ especially for taxis) and finally giving the Falcon SUV spin-off, the Territory, a ‘clean diesel’ version of the 2.7-litre turbocharged V6 developed and built here in Europe in a JV with PSA.

Ford is getting unspecified help from the Australian government’s green car innovation fund and the Victoria state government. It previously said it would alter the locally manufactured I6 engine to comply with Euro IV emission standards though earlier local reports had said it would ultimately be replaced by a US designed (and made) V6.

Changing global economic conditions had ended plans to manufacture the Focus in Australia, the automaker added.

“After assessing the global requirements and costs of producing the next Focus in Australia, Ford determined that the changing economic conditions meant it could not make a business case for profitably manufacturing the car at its operations outside of Melbourne.”

It said it would economically source small cars for the Australian market from overseas locations, while investing in leading-edge technologies to serve its core Falcon and Territory customers. The decision to not make the Focus in Australia would not result in any job losses.

Most current Focus models are shipped in from South Africa and differ in detail from cars built in Europe, source of the top version only.