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Jaguar will on Friday announce a multi-million-pound deal to launch its first range of diesel models, according to the Welsh newspaper, the Western Mail.

The paper says the deal will link Jaguar parent company Ford with Peugeot and Citroen owner PSA to put diesel engines into the legendary British cars for the first time in the firm’s 81-year history.

Ford Motor Company president Sir Nick Scheele, PSA Peugeot Citroen chief executive Jean-Martin Folz Jaguar Cars chairman Bob Dover are to reveal details of the venture at Jaguar’s research and development centre at Whitley, in Coventry, the Western Mail said.

The paper said an all-new, high-performance, 2.7-litre V6 diesel engine capable of developing more than 200bhp will make its debut in the Birmingham-built S-Type Jaguar next year.

The Western Mail said it also understood that Jaguar would next week unveil a diesel version of its smaller X-Type model to be powered by Ford’s 2.0-litre Duratorq engine and scheduled to go on sale in September.

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By GlobalData

The paper said the move would give Jaguar a significant boost in the European Union car market where, last year, almost 40% of new cars sold were diesels.

The Western Mail noted that Ford and PSA have been collaborating in a project to develop state-of-the-art diesel engines since 1998 – a deal which has already seen more than £900m invested by the two companies in the French-built 1.4-litre HDi diesel which powers the Citroen C3 hatchback and the Ford Fiesta.

This, the third phase of the co-operative plan, will see the new PSA V6 diesel being made in the UK at Ford’s plant at Dagenham in Essex, the paper said, adding that the engine would later find its way into Peugeot models.

Other recent reports have suggested the new V6 will also be used in some Ford models.