PSA Peugeot Citroën CEO Jean-Martin Folz on Wednesday said the group will unveil a diesel-hybrid prototype at the beginning of 2006.

Speaking at an event to mark five years of car production in Brazil, Folz didn't give details but said the development would bolster the company's conviction that diesel vehicles are better for economy gains than petrol or petrol-hybrid cars.

"Diesel engines deliver equivalent performance to a petrol engine with fuel consumption reduced by 20%. The benefits of a petrol-hybrid system are comparable to those gained by substituting petrol engines for diesel engines and hybrid models are also more expensive.

"Only a diesel-hybrid system is attractive because it offers a real fuel consumption reduction," said Folz.

The PSA CEO said there is no room for petrol-hybrid cars in Europe, where diesel engines are well accepted. They are better suited to countries where petrol engines dominate, such as the US and Japan.

PSA is supporting Brazilian research of biodiesel that uses a soy-based fuel with alcohol derived from sugar cane (100% renewable energy sources). Five Peugeot and Citroën prototypes are running on B30 fuel (a 30% biodiesel blend).

Folz said a diesel-hybrid car using biodiesel for fuel would greatly reduce emission levels but the high price of the hybrid system is still a problem for automakers.

"We will unveil the prototype to show that this technology is possible, but we don't know if we will make cars with it. We do not yet know if there are buyers prepared to pay more to save fuel," Folz added.

Rogerio Louro

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