Detroit's Battle for Better, Smaller Engines

The trick at Ford and GM is balancing better fuel economy and power with consumer desire for vroom

by David Kiley

There is a new battle shaping up between General Motors (GM) and Ford (F) over engine superiority. And it's not the race for who can achieve the highest horsepower. With gas prices expected to stay above $3 per gallon and pressure on automakers to reduce carbon dioxide emissions, the new battle is over which companies can shrink their engines' sizes and displacements without compromising driving performance or leaving power-hungry customers behind.

What does this really mean? Gas-thirsty V-8 engines in passenger cars and crossover SUVs will soon be an endangered species. This fall, Ford will launch the first in a series of smaller engines it is calling gas turbocharged direct-injection engines, or GTDI engines. These engines, the first of which will appear in the 2009 Lincoln MKS sedan, will achieve a 15% improvement in fuel economy over Ford's current engines. Over the next five years, Ford expects to put 500,000 vehicles equipped with the new engines on the road worldwide, with faster growth after that.

Automakers, especially U.S. companies, have been locked in a mindset of "bigger and faster is always better" for decades. Indeed, horsepower wars have been seen as a close cousin to the trend of bigger, thirstier SUVs. The crescendo of this thinking was perhaps reached in 2003 when GM showed a concept car at the Detroit Auto Show, the Cadillac Sixteen, which achieved 1,000 hp. In a stark reversal, GM said this month that it is scuttling its plans to build a new V-8 engine for its passenger cars and will instead, like Ford, focus on high-performance V-6s. Pickup trucks and SUVs will continue to offer V-8s.

Sales Boost?

The MKS sedan will be introduced with what Ford may call, for marketing purposes, the "EcoBoost" 3.5-liter twin-turbo direct-injection V-6, expected to produce 340 hp. This same engine will migrate to other Ford models including the Taurus, Edge, and Lincoln MKX crossover SUVs in 2009. The boost in fuel economy compared with a V-8 engine is 2 mpg, or about 15%. Ford also plans to use the engine technology in four-cylinder engines as a way to match performance with larger 3.0-liter, six-cylinder engines while getting 5 mpg better fuel economy than the V-6s achieve. And there is a 7% to 15% reduction in CO2 emissions per vehicle with an EcoBoost engine.

The EcoBoost engines don't pack the "wow" factor of, say, hybrids, which beat competitors in some cases by 15 to 20 mpg, or the promise of plug-ins, which will be able to go up to 40 miles on an electric charge. But Ford global product development chief Derrick Kuzak says Ford's new gas engine strategy will deliver major savings of gasoline and carbon dioxide emissions because of the millions of vehicles Ford sells worldwide each year.

Kuzak, a soft-spoken man who is a contrast to many Detroit product executives who trumpet the latest horsepower boost, hydrogen car, or futuristic design, is hoping that Ford's engine strategy will appeal to customers who do their homework on the Internet. According to Kuzak, a customer's initial investment in EcoBoost technology, which will cost a little more than standard engines, will be regained through fuel savings—less trips to the pump—in just 2.5 years. "That compares with more than seven years to recoup the price of a clean diesel engine and more than 11 years to get back the investment in a hybrid."

Advocacy and Marketing

Part of the appeal of hybrids and diesels, though, up to now is "badge appeal." Buyers of Toyota's (TM) Prius and Volkswagen's (VLKAY) TDI diesel vehicles are not just consumers, they tend to be advocates. They not only want to be seen in their more fuel-efficient cars, they try to convert their friends.