For the Mk III, the 1.6 L Zetec engine was dropped while the 1.8 and 2.0 L engines were heavily revised and were renamed Duratec. The standard 2.5 L V6 engine was carried over, while a 3.0 L version was developed for the ST220 model.
The archaic Endura-E 1.8 L turbodiesel engine was dropped and replaced by a more sophisticated 2.0 L Duratorq direct-injection (TDCi) unit with a variable geometry turbine. This clever turbine system allows a certain amount of overboost, giving an extra 10% or so of torque for short periods. This engine, known within Ford as the "Puma"-type Duratorq, was first seen in the Transit in detuned form.
A new automatic transmission was added to the range called the Durashift. This unit has five gears and may be shifted manually or shifted like an automatic.
For 2004, the Mondeo was given a very mild upgrade, the new models being identifiable by the larger chrome honeycomb grille, a new central dashboard made from higher quality materials with electronic climate control, either a standard Ford radio, Sony radio or a satellite navigation radio/CD player which also has climate control built into the unit in lieu of the space taken up by the unit. The Durashift automatic is now available with steering wheel control, while a 96 kW (130 PS) common rail version of the Duratorq turbodiesel engine became available. The gasoline engines were revised at this stage also — the new SCI (direct-injection) version of the 1.8 L Duratec engine was introduced which generates 4 kW (5 PS) more than the standard unit. In addition, equipment was upgraded across the range — with cruise control and a trip computer now standard on all models.
In 2005, there were two new Duratorq direct-injection (TDCi) options, a 2.2L with 114 kW (155 PS) and a detuned version of the 2.0L with 65 kW (89 PS). Also, the Seat Belt Warning System was added and is now standard, with an audible/visual warning signal reminding the driver to fasten his/her seat belt. The styling was upgraded again, the most notable difference being tweaked taillights.