Mitsubishi will use a diesel engine developed and produced by Mercedes-Benz in its Colt replacement — the so-called “New Compact Car” — due next year, Automotive News reported from the Geneva motor show.

“The engine will be built in Germany at Unterturkheim,” Automotive News cited Mitsubishi CEO Rolf Eckrodt as saying.

The newspaper noted that Unterturkheim is DaimlerChrysler’s sprawling engine and transmission centre and that the German car maker owns 37% of Mitsubishi.

Automotive News said this would be the first time that Mercedes components would be used in a Mitsubishi model and added that the same diesel engine would be used in the future four-door Smart that would be based on a common platform with the New Compact Car.

Both models will be produced at NedCar, Mitsubishi’s plant in Born, the Netherlands, Automotive News said.

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Other engines for both models will be built at a new DaimlerChrysler-Mitsubishi joint venture plant in Kolleda in the province of Thuringen, eastern Germany, the trade newspaper added.