From the same company that brought us the world’s first diesel-electric hybrid, comes a new concept that does away with the electric component of hybrid cars and replaces it with compressed air instead.

That company is French automaker PSA Peugeot Citroen, which at its recent Innovation Day held in Vélizy, France, unveiled this Hybrid Air concept car.

Several years ago we brought you details about cars powered purely by air, where compressed air is used to push pistons inside a motor rather than the traditional method of burning a mixture of fuel and air.

While we still haven’t seen any of these ‘air cars’ produced in volume numbers, PSA Peugeot Citroen is hoping to finally take the technology mainstream. Its new Hybrid Air concept combines a regular internal combustion engine with a special epicyclic transmission and hydraulic motor powered by compressed air.

Like a conventional hybrid vehicle, the new Hybrid Air concept uses the gasoline engine for cruising on the highway, the hydraulic motor around town (it’s capable of speeds up to 43 mph), and a combination of the two power sources during high load situations such as hard acceleration or climbing a hill.

To refill the tanks, the hydraulic motor works in reverse, using regenerative forces to suck in air and compress it for later use.

According to its designers, a small city car like the one previewed by the concept could average a fuel economy of about 117 mpg. The other benefit of the system is that it only adds about 220 pounds to the weight of a car, which is considerably less than a heavy battery-based hybrid. It’s also considerably cheaper, making it ideal for cheap city cars.

PSA Peugeot Citroen hopes to have the first production applications ready by 2016.