A new version of Audi's A3 diesel hatchback on sale in the UK is proof that CO2 emissions-related taxes and charges in a market will prompt automakers to develop appropriate technology.

The new 'green' version of the A3 1.9Tdi, with 119g/km CO2 output, will be exempt from proposed new CO2-based 'congestion charges' in London. A final decision on the new charges, proposed by the capital's anti-car mayor Ken Livingston, is expected in October.

Perhaps more importantly, for owners outside London, the new A2 falls into the annual road tax band B (101-120g CO2) which costs £GBP35 (about $US70) a year. The A band, 0-100g attracts no tax and the C band, 121-150g, results in an annual charge of GBP115.

Some local councils have also proposed charging car owners for residential parking permits according to their vehicles' CO2 outputs, with massive increases in such charges for high-emissions models.

The new Audi's engine, transmission and aerodynamics have been optimised to reduce CO2 output to 119g/km and increase fuel economy to 62.7mpg on the EC combined test cycle.

Order books open late this month at GBP16,660 (about $33,500) for the three-door version or GBP17,160 for the five-door with first deliveries expected in early October.

The engine develops 105PS of power at 4,000rpm and 250Nm of torque at 1,900rpm, and accelerates the new model from 0-62mph (100km/h) in 11.4 seconds. It has a top speed of 120mph (200km/h).

Audi said the specially modified version of the already frugal 105PS diesel - long a staple of VW Group models - has new friction-minimising components and redeveloped ancillary units, combined with a manual gearbox with remapped, economy-biased ratios and a dashboard indicator informing the driver of the most effective gear change points for optimum economy.

Emission reduction is helped externally by tyres with reduced rolling resistance, and by additional body modifications to further increase aerodynamic efficiency.

Audi said similar measures would be used on more efficient versions of other models in its range "in the near future".

These more environmentally considerate models will be engineered with the benefit of experience gained during the development of the pioneering, aluminium-bodied A2 compact hatchback of 1999, which offered 81g/km CO2 output and 94-plus mpg capability and is, Audi claimed, widely regarded as a car ahead of its time.

Audi also said added that delivery lead times for UK customers would be shortened because a significant proportion of left-hand-drive A3 production has now been absorbed by a factory in Brussells, freeing up additional right-hand-drive A3 capacity at the Ingolstadt plant in Bavaria, Germany.

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