Two-litre, four-valve Volkswagen engines supplied to DaimlerChrysler in a deal announced on Wednesday will be fitted to Mitsubishi Grandis minivans for sale in Europe from 2005, Associated Press (AP) reported, citing Kyodo News.

“Instead of opting for an expensive stand-alone development of diesel engines, we will source diesel engines from wherever it is best for our customers,” Mitsubishi president Rolf Eckrodt said in a press statement, according to AP.

Mitsubishi also said it will secure the supply of diesel engines for use in its passenger cars to be marketed on the European market from non-Mitsubishi suppliers, AP added.

According to AP, Mitsubishi officials reportedly said that it would be too costly for their company to develop environmentally friendly diesel engines capable of meeting the severe “Euro 4” exhaust gas pollutant regulations to be imposed by the European Union starting in 2005.

The DaimlerChrysler-Volkswagen framework procurement agreement is good for 10 years, AP noted, and calls for Volkswagen to supply up to 120,000 diesel engines annually for use in both Mitsubishi and Chrysler vehicles.

AP noted that Mitsubishi currently installs Renault diesel engines in compact passenger cars assembled at its European plant.

Mitsubishi said earlier said it plans to equip its Colt compact car, which it will start selling in [Europe in] spring 2004 with diesel engines supplied by DaimlerChrysler from its Stuttgart-Unterturkheim plant, Associated Press added.