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.

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