Detroit's Battle for Better, Smaller Engines

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Ford's new chief marketing officer, Jim Farley, who came to the automaker after a career at Toyota, says marketing of the new technology will be key to success. "People will have to feel they are doing something for the planet as well as for themselves, and we have to figure out the right name, badging, and advertising to convey that," says Farley.

Dumping V-8 engines in passenger cars, especially premium and luxury cars, is a marketing risk, but perhaps one whose time has come. For two decades, Honda's (HMC) premium division, Acura, has not offered a V-8 in its flagship sedan, the RL. Before that, the Acura Legend sedan only went as high as a V-6. American Honda chief Tom Elliott has said on more than one occasion that the U.S. management team for the Japanese automaker has repeatedly made the case, to no avail, to their Japanese parent for a V-8 for both the RL and the Honda Ridgeline pickup.

The RL sold an anemic 6,262 units in 2007, down 45% from 2006. The Lexus LS (BusinessWeek.com, 2/14/07), which only comes in a V-8, by contrast, sold 35,000 units, up 75% from the year before.

Many buyers just can't accept that smaller is better. Ford, for example, when it launches a redesigned F-Series pickup this year, will no longer offer a V-6 engine, which had such a low purchase rate that Ford couldn't justify stocking the engines at the factories.

A New Era

Oddly, though, GM is seeing signs that its Honda V-6 engine strategy is pointing the way to a new era. The new direct-injected V-6 in the 2008 Cadillac produces 305 hp, while its Northstar V-8 in the Cadillac DTS (BusinessWeek.com, 1/19/07) generates only 275. The fuel economy of the DTS, a slightly larger car, is 15 mpg city/23 highway, while the CTS (BusinessWeek.com, 10/22/07) is rated 17/26. The same high-performance V-6 could go into the DTS and improve fuel economy while boosting horsepower.

The Lexus LS sedan only comes in a V-8, generates 380 hp, and gets 16/24 mpg. Lexus clearly engineers its sedans for power and fuel economy in a smarter way than Detroit automakers.

Ford, which is launching gas-electric hybrid versions of the Ford Fusion and Mercury Milan later this year, is not making big promises of delivering more hybrids or plug-in cars at a certain date. But it is working on other improvements to whittle away at fuel economy. Kuzak says between 2012 and 2020, Ford figures to reduce the weight of vehicles between 250 lb. and 750 lb., depending on the vehicle, without compromising safety. Such savings can add a couple of miles to each gallon of gas. "No automaker can wait around for technology to arrive; we have to make the most of what we know and have now," says Kuzak.

Kiley is a senior correspondent in BusinessWeek's Detroit bureau .