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Truck maker Volvo aims to begin mass production in 2009 of a hybrid diesel-electric truck engine which would cut fuel consumption by up to 35 percent.

The Swedish group said that rising oil prices and political efforts to fight global warming by reducing emissions of carbon dioxide meant it now saw potential for a commercial launch of a more expensive, but more fuel-efficient hybrid truck engine.

The new engine runs on both diesel and electric power from a battery.

Volvo said that the new engine would be economically viable mainly for short-haul trucks, buses and construction equipment as electric propulsion was used mainly in connection with starting and stopping and at low speeds.

Volvo said it had invested $44.4 million to $50.8 million (350 million to 400 million Swedish crowns) in developing the engine and related components and would spend "one or more" billions in setting up serial production.

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