Volvo begins production of its new 4-cyl. gas and diesel engines that will play an integral part in the auto maker’s plan to improve fuel efficiency across its lineup.

The new Volvo Engine Architecture (VEA) engines, designed in-house, are optimized and deliver higher performance than today's 6-cyl. mills, while offering lower fuel consumption than the current generation of 4-cyl. units, the auto maker says. The engines’ displacements, projected horsepower and torque ratings have yet to be announced.

The engines are being produced at Volvo’s Skövde, Sweden, plant, which recently received SK2 billion ($303 million) in upgrades.

“One of the biggest challenges was the remodeling of the line for cylinder block processing,” Oskar Falk, vice president global engine production, says in a statement. “Thirty machining cells were replaced or converted.”

Volvo says about 20,000 engines will be produced this year, with output increasing to 2,000 units a week by year’s end.  The first engines will be fitted to the Volvo S60, V60, XC60, V70, XC70 and S80 in autumn 2013, the auto maker says.