Nikkei Sangyo, Japanese business daily, has reported a new engine to be used in the Liberty sedan, Impreza and the Exiga, will be launched by the end of the year.
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A spokesman from Fuji Heavy Industries - Subaru's parent company - has confirmed a new engine will be introduced by the end of the year and that it will be 10 percent more fuel efficient than the existing engine.

No official specifications have been released, although, according to Nikkei Sangyo the new engine will be a four-cylinder boxer sized between 2.0-2.5 litres. Reports say the new engine will be developed with a serious focus on fuel efficiency, using a constantly variable transmission to improve consumption figures.

Although the engine may share similar specifications to the motor used in the current crop, the company hasn't produced a completely overhauled engine for 20 years. Sources are also saying the new engine could be the one, or at least based on the one, that was exhibited at the 2009 Tokyo Motor Show in the Subaru Hybrid Tourer Concept.

This used a petrol 2.0-litre boxer using direct injection and a turbocharger. Other new technologies to coincide with the release of the new engine will be a stop/start system, along with the CVT gearbox and direct injection.

Subaru has always struggled when it comes to fuel economy due to the constant four-wheel drive system that uses a lot of the engine's power. Take the Subaru WRX for example. The current model uses an average of 10.4 litres of fuel per 100km whereas the Volkswagon Golf GTI - a common rival to the WRX and in the same price range - uses an average of 7.7L/100km. The WRX is one second quicker to 100km/h though (5.9 seconds versus the Golf's 6.9 seconds). But it will be great to see Subaru step up to the mark in this area making it an excellent all-round proposition.

There's no denying Subaru's four-wheel drive safety though. Almost all of the rivals don't offer such reassurance. We'll keep you updated with more information about the new engine as its release approaches.