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by Tim Beissmann

Volkswagen has unveiled a 200kW version of its 2.0-litre four-cylinder turbo diesel engine that is more fuel efficient than less powerful engines yet more powerful than larger units.

The new engine is based on the existing EA288 diesel powerplant that’s available across the Volkswagen line-up, and is enhanced with the introduction of a new two-stage electrically operated turbocharger, a new variable valve timing system, and a piezo valve common rail inject system that works up to pressures of 2500 bar.

The German car maker claims the 200kW 2.0-litre engine is 14 per cent more economical than the 176kW version launched in the new-generation Volkswagen Passat, pointing to combined cycle consumption as low as 4.6 litres per 100 kilometres in a similar-sized vehicle.

It also outguns the 2015 Volkswagen Touareg’s larger 3.0-litre V6, which was recently uprated to 193kW.

Volkswagen has not announced the new engine’s final torque figure, though Autocar reports that company officials suggest its output will be comparable to the 500Nm offered by the 176kW version.

The powerful yet frugal engine is set to form an important part of Volkswagen’s efforts to meet ever-tightening emissions regulations in Europe and other parts of the world.

The engine will find its way under the bonnets of Volkswagen’s larger models, potentially including the brand’s biggest ever SUV, the production version of the CrossBlue concept.

The engine will be paired with Volkswagen’s upcoming 10-speed ‘DSG’ dual-clutch automatic transmission, which the company detailed at the Vienna motor symposium in Austria in May.

The new transmission will work with both transverse and longitudinal engine layouts and is scheduled to begin replacing the current six-speed DSG used in high-torque applications from 2016.