Mitsubishi Motors and Mitsubishi Heavy Industries have agreed on a joint development project for a new generation diesel engine to be used in cars exported to Europe.

After the agreement is finalized, production is expected to start in 2010.

The engine will be a 2.0-litre unit aimed for use in small to mid-sized cars. Development will be completed in mid-2009 and the engine will be introduced to Mitsubishi Motors’ key European market models.