Fleet cars using diesel engines which do not meet Euro IV will carry a 3% penalty under the new company car tax. No Euro IV diesels are on sale in the UK and engines are not legally required to comply with the legislation until 2005. Kevin O'Neill, director of Ford diesel business unit said although diesel sales in the UK were rising, the timing for introducing Euro IV diesels would depend on marketing strategies.
Volkswagen Group says it can also deliver Euro IV diesel engines and plans to introduce them in the UK within 18 months, and Ford has committed itself to becoming 'number one for hi-tech diesel'.
Ford will have invested $1billion (£700million) in its Dagenham diesel operations between 1995 and the end of 2004. Building work on the new Diesel Business Centre is due to begin in August with diesel engine assembly beginning in two years.
Ford of Europe president and chief executive officer David Thursfield said: 'With company car tax based on CO2 figures and high fuel prices, it will be very attractive. We have never pushed diesel in the UK because we have not had the capacity, but we now expect to become serious players in the diesel market.'
Combined with the company's engine plant at Bridgend, Ford's UK engine production will reach two million units a year, and by 2005 it is expected that a quarter of new Ford vehicles worldwide will be powered by a British-built engine.