THE first fruits of Ford's diesel engine agreement with PSA Peugeot Citroen will be seen with the launch of the new Fiesta in the autumn. A combination of Ford's agreement with PSA and the transformation of its Dagenham operation into a global centre of diesel production producing one million units a year from 2004 will meet UK and European diesel demand in the future.

At Geneva numerous manufacturers were talking up diesel as the fuel of the future. With demand for diesel in continental Europe running at more than 50% of all new cars sold in some markets, Ford is confident that UK demands for diesel will dramatically increase from the current level of about 15%. A combination of carbon dioxide emissions-based company car tax and Vehicle Excise Duty is playing into diesel's hands.

Ford has unveiled its first common rail diesel - the 1.8-litre Duratorq TDCi - which will power the Focus from the summer. It will be followed by common rail diesel Mondeos. Ford's agreement with PSA will see the French company concentrate on producing diesel engines for small cars - probably sub-lower medium sector - while Ford will focus on the larger end of the marketplace.