BMW says it will introduce a diesel 7-series in March 2003 as it tries to grab market share from the Mercedes-Benz S320 CDI.

The 730d has an engine based on the unit already in the 330d and 530d, although higher fuel injection pressure has resulted in improved power, up from 193bhp in the 5-series to 218bhp in the 730d. Torque has been improved and combined fuel economy is very similar to the 5-series, at 33.2mpg.

BMW claims the 730d will be the world's first diesel car to use a six-speed automatic gearbox. Top speed is 146mph and 0-62mph takes 8.0 seconds. No CO2 figure is available yet.

Prices have not been announced, although expect it to be very competitive against the S320 CDi, which means at least £48,000. The diesel S-class accounts for more than 50% of all S-class models sold in the UK.

BMW has also confirmed that it will produce a hydrogen-powered version of the 7-series.

The BMW Group and PSA Peugeot/Citroën have announced a joint venture to manufacture a new family of small petrol engines. Peugeot, Citroën and future variants of MINI vehicles will be equipped with engines from the project. The production capacity will meet the future needs of Peugeot, Citroën and MINI vehicles and could reach up to one million units a year.