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PSA Peugeot Citroën has announced that it will spend €175m to tool up one of its engine plants to build a new turbocharged inline-three cylinder engine.

The Douvrin engine plant will have a capacity of 320,000 powerplants per year starting in early in 2013, says the company as reported by Autoblog on Tuesday. The 1.2-litre engines will join a normally aspirated version that debuts one year earlier.

While PSA is one of the world leaders in diesel engine technology, this new engine is a gasoline-fueled unit. The high-volume commitment to a downsized gasoline engine is a sign of the increasing difficulty of meeting both new carbon dioxide emissions standards and nitrogen oxide standards that are part of the Euro VI package.

While PSA has no current plans to sell either Peugeot or Citroën vehicles in the United States, we are likely to see some three cylinder units coming from other automakers in the next few years including BMW, Mercedes-Benz, Volkswagen and possibly Ford with a rumored 1.2-litre Ecoboost.