TWO key players in the UK company car market are allowing a fast-growing rival to have exclusive rights to a new engine that sets new standards in diesel power for small cars.

Despite being developed as part of a far-reaching joint collaboration deal signed two years ago between PSA Peugeot Citroen and Ford, the high performance motor is not being taken up by Ford in the Fiesta – and it is being made available to only one of the French group's brands until at least next year.

Though the base version of the advanced 1.4-litre unit is already powering a total of 15 cars in the Peugeot, Citroen and Ford ranges, the C3 supermini is the launch model for the low-friction HDi engine fitted with 16 valves. As such, it is the only car to offer buyers an extra level of efficiency and a pace-setting blend of power and economy.

The surprising marketing move – revealed in Paris when the 16-valve turbodiesel C3 was unveiled – is a coup for Citroen, which sold more than 35,000 diesel cars in Britain last year to achieve 101% growth and the greatest expansion of any volume manufacturer. In the first five months of this year, Citroen UK posted a further 75% increase in diesel registrations.

A company executive told Fleet News: 'Armed with this new technology, we are clearly ahead of the pack and are now able to offer the best power output for this size of engine.

'This development allows us to claim a combination of superior acceleration and lower consumption in the supermini sector – there is no doubt this opens up a considerable advantage for us across all markets.'

In Coventry, a Peugeot spokesman confirmed the company had no plans to offer the 1.4 HDi 16-valve engine in the immediate future but added: 'Economies of scale rule out developing one engine for one brand – I think we will be offering it sometime next year.'

But a Ford spokesman said: 'We will take the lead when the larger-capacity engines in the joint deal become available. In the meantime, we will not use the 16-valve unit – our view is that the Fiesta doesn't need this technology in order to be recognised as a class leader because the rest of the package is right.'

Boasting second-generation common rail injection, a variable geometry turbocharger and an air-to-air intercooler, the new HDi gives a dramatic new dimension to the compact and lightweight C3. Significantly, economy figures vary little between the two units, with the higher-power engine returning a combined figure of 65.6mpg, compared with the 67.2mpg of the standard unit. Similarly, carbon dioxide emission figures also show little difference at 112g/km against 110g/km.

Behind the wheel

Launched only two months ago, the Citroen C3 is a 'tall' design that uses all the latest styling ideas to make its occupants feel like they're travelling in a bigger car. But when it is powered by the ultimate HDi engine, this supermini also has the demeanour of a car from the class above.

With the new 92bhp motor under its bonnet, the supermini sprints to the benchmark 62mph speed in 12.9 secs and goes on to reach 112mph all-out – considerable improvements on both the 15.4 acceleration time and 102mph top speed of the standard HDi version, which has an eight-valve layout and produces 70bhp.

With a lot of torque available from about 2,000rpm, the new model zooms away from the lights and has the acceleration that would have rated GTi badging only a few years back. Yet zippy as it is around town, it is even more impressive out on the open road. Here, the C3 sheds its supermini origins in impressive manner as it strides along in relaxed fashion. Because it develops so much pull, the little motor is mated to high ratios and at an indicated 80mph in fifth gear, the rev counter shows it is spinning at only 2,500rpm.

The 16-valve unit uses pressure-cast aluminium for its cylinder block and composite material for the intake manifold, cylinder head cover, water inlet and outlet housings and the treatment system for crankcase fumes.

Featuring more precise pilot-injection and higher injection pressure, it has a good acoustic performance and has little of the traditional diesel 'clatter' at idle speed.

At a premium of only £330 over the 8-valve model, this new engine is a bargain and begs the question: how long will it be before Citroen UK drops the lower-powered unit it offers with SX and Exclusive trim?

Model: C3 1.4 HDi 16v
Max power (bhp/rpm): 92/4,000
Max torque(lb-ft/rpm): 147/1,750
Max speed (mph): 112
0-62 (sec): 12.9
Comb economy (mpg): 65.6
CO2 emissions(g/km): 112
On sale: Now
Price (OTR): SX - £11,295, Exclusive - £12,295