The engine is a newly developed 1,686cc unit equipped with a common rail high-pressure fuel injection system that delivers a maximum output of 100bhp. Isuzu is expected to provide 5,000 engines until March 2002 and another 15,000 engines annually from April.
Honda is also developing a new 2.0-litre turbodiesel and wants to push on with mass production for the next generation Accord, due to be launched in 2003. The engine will be developed with technical support from Isuzu.
Honda is switching production of the Accord from Swindon to Japan after the 2002 model year, allowing the British plant to focus on vehicles using the Civic platform.
In 2000, Honda reported record European losses of £329 million, citing its absence from the diesel sector as a contributing factor. But sales of Swindon-built Civic cars are expected to push unit sales in Europe up from last year's 191,000 to 350,000 in the mid-term.
The £130 million Swindon plant will see production capacity utilisation rise from about 50% to 80% this year, and 100% in 2002. Employees have already started low-volume production on the Civic five-door model.