Auto parts manufacturer Bosch already has a contract with one of Europe’s carmakers for the supply of diesel-hybrid technology. Its developers claim the system could be on the road by 2010 and that it would be the new benchmark in fuel consumption, with carbon-dioxide emissions levels below 100g/km.

Under the contract, Bosch will supply the electronic controller and motor to work in conjunction with a diesel powerplant. Until now, carmakers considered diesel hybrid powertrains to be too expensive but increased pressure from governments to ease CO2 emissions are forcing them to rethink the premise.

PSA/Peugeot-Citroen had hoped to be the first carmaker to launch a diesel hybrid vehicle, and Automotive News reports that Bosch is also bidding with the French Group for a hybrid version of a model other than the midsized 308. Peugeot is reported to be developing its own system for the 308 and had previously claimed to have it ready also by 2010.

Meanwhile, Bosch will be supplying petrol-electric hybrid technology to Volkswagen, Audi and Porsche with the first deliveries expected to start next year.