Peugeot will reveal its 308 Hybrid HDi at the Frankfurt Motor Show in September 2007.
The company has stated that it believes the vehicle is "the environmentally-friendly car for the next generation", emitting 90 grammes of CO2 per kilometre.
Compared with a standard 308 HDi, the car is more fuel-efficient by 58 per cent due to its Urban Drive Cycle, giving motorists peace of mind and better value as they steer.
Price is a key issue for the manufacturer and it has stated that it is to use parts from other Peugeot vehicles in order to keep costs down and competitive across the market.
"This has enabled the number of specific parts associated with the hybridisation of the 308 to be reduced by around 30 per cent compared to the previous 307 Hybrid HDi demonstrator," the company commented.
Other popular products from Peugeot include the 206, 207 and 807.