PARIS — PSA Peugeot Citroen and Ford Motor Co. finally launch their long-awaited 1.4L common-rail, direct-injection turbodiesel I-4, the first fruit of their diesel engine-making joint venture announced in 1998.

PSA Chairman Jean-Martin Folz boasts that the “featherweight” diesel will go into 23 Ford, Peugeot and Citroen vehicles in the next several years.

But behind his enthusiasm are hard numbers and calculated industrial policy that promise to reduce costs for both automakers and give Ford the boost it needs to halt a sales decline in Europe.

Ford is leading development of a 2.7L V-6 engine for luxury cars and a 4-cyl. for commercial vehicles. PSA is the leader for a new 2.0L engine in addition to the 1.4L I-4, which also will spawn a 1.6L variant.

Production capacity at the Douvrin plant, in northern France, is 2,500 engines per day, or about 600,000 annually. The companies are 50/50 partners, but production will be divided according to demand. Neither automaker is opposed to selling engines to third parties, but that is unlikely to happen soon.

Folz says the companies already are looking for a second factory site. Douvrin was designed to be most flexible and profitable when sized to be a 2,500 per day operation, with around 700 workers.

The first cars to get the engine will be the Peugeot 307 and 206, an unidentified Citroen, and the all-new Ford Fiesta, which will be introduced at the Frankfurt Motor Show this fall.

For Ford, the engine represents a real opportunity to play catch-up. Sales of the Fiesta have fallen from more than 500,000 in 1996 to fewer than 300,000 last year. Now, diesel availability will add to the allure of the redesigned Fiesta coming this fall.

Kevin O'Neill, Ford's director of diesel engine development in Europe, says the availability of the 2.0L Duratorq diesel in the Focus was behind Ford of Europe's return to profitability in the first quarter and soon will add to Mondeo sales.

“Ford has been admired for its diesel engines in commercial vehicles,” says O'Neill, “but we were slow in responding to the demand for advanced-diesel passenger cars.”