Ricardo PLC has signed an agreement with Chongqing Lifan Automobile Engine Co. to develop a 1.0-liter turbocharged direct-injection engine for small vehicles.

Ricardo engineers in Shanghai and the United Kingdom will work on the project, the company said, and the engine will help Lifan meet China's Stage 4 fuel economy requirements.

Ricardo and Lifan have collaborated on other engines. In 2011, for instance, Ricardo announced plans to design a 1.2-liter turbocharged direct-injection gasoline engine for Lifan that meets Euro V emission standards.

Lifan, of the southwest China city of Chongqing, is a private manufacturer of motorcycles and cars. The company's lineup includes the Lifan 320, 330, 520, 620 compact sedans and the L720 midsize sedan.

Ricardo, of the United Kingdom, has provided engineering services to a number of domestic Chinese automakers such as Lifan, Jianghuai Automobile Co., Great Wall Motor Co., Chery Automobile Co. and Shanghai Automotive Industry Corp.

For the six months ending Dec. 31, Ricardo's global revenue rose 8 percent year on year to 121 million pounds (1.11 billion yuan at current exchange rates).