SOARING demand for Peugeot's common-rail diesel engines has hit the launch date for the new 90bhp Peugeot 306 HDi.

The manufacturer was planning to launch its new 2.0-litre HDi this month but says this has had to be pushed back until July while it increases production to cope with demand for the 110bhp unit in use in the 406 HDi. A spokesman said: 'There is great strength of sales and a great future for the diesel engine, but Europe-wide demand for the engine has caused delays and we are now hoping to launch in July.'

The 2.0-litre 90bhp unit will replace the 306's 1.9-litre turbo diesel unit. Among the benefits of the new engine are improved fuel consumption - about 54.3mpg compared to 42.8mpg for the old unit - service intervals of 12,000 miles instead of 10,000 and a lower carbon dioxide rating, of 141 grammes per kilometre compared to the old unit's 175g/km.