On sale for August, the common-rail 16-valve engines are to be fitted with particulate filters and will be among the first to be Euro IV compliant.
Under the new carbon dioxide benefit-in-kind tax regime, diesel-engined cars incur a 3% penalty when being assessed for their company car tax liability, meaning the lowest tax band is 18%. However, this does not apply if a vehicle is Euro IV compliant and could enable a flood of drivers to shift to cars that incur just 15% tax.
Peugeot is set to reveal that for the first time there will be a 1.6-litre HDi unit. The engine, with about 100bhp, is likely to be an option in both 206 and 307 ranges. At the top of the diesel 307 range will be a new 2.0-litre HDi model with 135bhp. It is aimed at taking on sporty versions of the diesel Volkswagen Golf, the country's most popular oil-burner last year. Both engines, which will fall into the lowest BIK tax bands, will also be used by Ford in the Fiesta and Focus models as part of the diesel co-operation agreement between the two firms.
The new units share the lightweight, all-aluminium technology of the 1.4 HDi already used in models from Peugeot, Citroen and Ford.
They will give Peugeot an HDi line-up of 1.4, 1.6, 2.0 and 2.2-litres, all potentially Euro IV compliant. Full details of the new HDis are due to be announced in Paris later this month.
Meanwhile Volkswagen, whose 34,000 diesel car sales in the UK in 2002 were almost 5,000 ahead of Peugeot, is preparing its own first Euro IV engines which debut in the small MPV Touran in July. One is a reworked 1.9 with 100bhp and the other an all-new 16-valve 2.0-litre unit, also with about 135bhp.
Vauxhall has already announced that it will have a Euro IV compliant Astra diesel model on sale by next month.