Ford Motor Co announced on Thursday that it will introduce this month a 1.5-liter version of its turbo-charged "EcoBoost" engine.
The new four-cylinder version will first be included in a the Mondeo sedan to be sold in China.
The smaller EcoBoost engine in the Mondeo will allow Chinese consumers to be eligible for a tax break when purchasing the car, said Raj Nair, head of product development for Ford.
Ford in 2009 introduced EcoBoost, which allows smaller engines to have the power of larger ones while cutting fuel use through turbocharging, direct fuel injection and variable valve timing.
The Mondeo with the 1.5-liter EcoBoost engine will be introduced at an auto show in Shanghai later this month.
Ford has sold 600,000 vehicles with the EcoBoost engine since it was introduced in 2009 in a 3.5-liter engine. A 2-liter engine arrived in 2010, a 1.6-liter engine in 2011 and a 1-liter engine in 2012.
By the end of 2013, there will be about 1.2 million Fords with EcoBoost engines on roads around the world.
Ford now makes the engines at six plants around the world, compared with two plants three years ago. By the end of the year, it will have the capacity to produce 1.6 million of these engines annually.
The first 1.5-liter versions will be made at Ford's engine plant in Romania beginning this month, said Joe Bakaj, head of powertrain engineering for Ford.
The first U.S.-version of the new 1.5-liter four-cylinder engine will be available later this year in the 2014 Fusion sedan. The Fusion is the North American version of the Mondeo. It will then be used in the Mondeo in Europe.