DaimlerChrysler has launched a new diesel-powered concept car.

The vehicle maker claims that the new 'bionic' car will vastly improve fuel economy while meeting strict pollution standards.

The German-US firm revealed that the car uses a "boxfish" shape to improve aerodynamics and a diesel engine that meets strict emissions standards in all 50 US states. The body of the car is based on the shape of the four inch long fish, which the auto giant claims helps cut fuel use and pollutant emissions, and has 25 per cent less wind drag than conventional cars.

The company does not expect to bring the Mercedes-Benz model to production, but will use parts developed for it in other vehicles. Parts of the car, such as door panels, have been designed to be up to 40 per cent more rigid and crash-resistant.

DaimlerChrysler executives unveiled the new prototype car at a company-sponsored technology symposium in Washington, claiming that it can go 70 miles on a gallon of fuel, 20 per cent more than the current best diesel cars.

Car makers in the US are responding to government pressure to boost fuel-efficiency and reduce emissions and DaimlerChrysler is also developing hydrogen fuel-cell and gas-electric vehicles.

Allen Schaeffer, director of the Diesel Technology Forum said the new car "signifies we are at the point where the hurdle of 2007 emissions standards can be met with an engine that can be brought to production".

The car is also being seen as indicative of the potential in the diesel market, with the US still tentative about the automotive technology.

Rising gas prices may help fuel demand for diesel cars in a similar fashion to the increase in interest in gasoline-electric hybrids, with US president George Bush recently declaring that he wants diesel-power passenger vehicles to receive tax breaks similar to those offered to owners of gas-electric hybrid vehicles.