Mazda could become the first manufacturer to offer a diesel model which meets Euro IV emission standards that will slash benefit-in-kind tax bills for company car drivers.

The firm will introduce a new 2.0-litre diesel common rail unit next year which it claims will be the first to meet the emission limits, beating more mainstream rivals, such as Peugeot and Volkswagen.

Under the carbon dioxide-based company car tax system being launched in April 2002, diesels will pay a 3% supplement on their tax bill, unless they meet the Euro IV emissions standard.

Several manufacturers have already said their future models will meet the standard, but Mazda's could be the first. The engine will first appear in the firm's MPV in the early part of next year and will also feature in its key new fleet upper-medium competitor, the Mazda 6, in the months following its launch in June.

The firm is expecting sales to reach 27,000 units next year, following a slump to 16,000 units this year, blamed on a change of ownership when Mazda took direct control of the UK operation.

Rob Lindley, marketing director for Mazda UK, said: 'We expect the new units, developed exclusively by Mazda, to put us into a class-leading position.'