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PSA Peugeot Citroen yesterday unveiled two prototype diesel-electric hybrid cars.

The French firm claims the Peugeot 307 and the Citroën C4 Hybride HDi will offer fuel savings of around 25 per cent over regular diesel vehicles and petrol-electric hybrids.

The two vehicles will have a diesel consumption of 3.4 litres per 100 kilometres, with 90 grams of CO2 emitted per kilometre.

The vehicles are equipped with a Stop & Start system that allows them to start up and drive using only the HDi diesel engine should the electric component be temporarily flat.

For main road and motorway driving, the electric motor is capable of offering a 35 per cent increase in power.

PSA Peugeot Citroën believes it could be producing Hybride HDi vehicles by 2010 dependent on the technology being available for a reasonable price.

"Our objective is to reduce the cost by a factor 2.5 to 3 so that the difference a consumer has to pay for a diesel hybrid is the same as that between a petrol and a diesel car, because the gain in fuel economies and emission reduction is the same," PSA's chief executive Jean-Martin Folz said.

Mr Folz claims that the reductions can come from more efficient engineering on PSA's behalf although it has asked for some of the 100 million euros the French government has set aside for research into cutting fuel consumption in transport.