Peugeot Citroen is preparing to enter the hybrid market and will debut a new model as early as next year, the company's chief executive has claimed.

Speaking in Brazil to celebrate the company's five years of car production in the country, Jean-Martin Folz revealed that the firm will unveil a hybrid vehicle at the beginning of 2006, although he refused to go into details.

According to Just-auto.com, Mr Folz revealed: "Only a diesel-hybrid system is attractive because it offers a real fuel consumption reduction."

His comments will come as a surprise to many, after he was quoted just last month saying hybrids "do not have long-term economic prospects because they are a lot more expensive to produce [than diesel engines] with the same results".

However, Mr Folz believes that using diesel engines in hybrids could offer greater benefits that make investing in them more attractive and far more cost effective.

He explained: "We will unveil the prototype to show that this technology is possible, but we don’t know if we will make cars with it."

Mr Folz added that this is because he is not yet convinced that there are enough buyers prepared to spend more money to save fuel.


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