Ford is developing a new range of downsized engines to meet demands for reduced CO2 output.

In an exclusive interview with Germany’s Automobilwoche magazine, Ford’s head of development, Jens Ludmann, speaking at the launch of the Mondeo in Sardinia, said that Ford’s approach to CO2 reduction across the group is two-pronged. “On the one hand we will be offering bioethanol versions of many model ranges, on the other hand downsizing is a big subject for us.”

The Automobilwoche article goes on to say that current 2.0 and 2.3 litre engines will be replaced by a 1.6 litre turbocharged engine.

This and bioethanol versions of the Mondeo could go on sale within the next year.

The Mondeo goes on sale across Europe on 16th June. Three body styles will be offered at launch and these will utilize all production capacity. The estate version is expected to be the best-selling body style.

Despite a limited infrastructure for bioethanol Ford remains convinced the fuel will be successful. Bioethanol vehicles will command a price premium of around 3000 euros.

An automatic version of the Mondeo will be available from this summer. A new six speed automotive will be combined with a 130PS diesel engine and later in the year a Mazda 2.3 litre gasoline engine.

Ford is working with GETRAG on a dual clutch transmission that should be available from 2008.