Today turbo-diesel powertrains offering low fuel consumption and good low-end torque comprise a significant fraction of the light-duty vehicle market in Europe. Global CO₂ regulation and customer fuel prices are expected to continue providing pressure for powertrain fuel efficiency. However, regulated emissions for NO and particulate matter have the potential to further expand the incremental cost of diesel powertrain applications. Vehicle segments with the most cost sensitivity like compacts under 1400 kg weight look for alternatives to meet the CO₂ challenge but maintain an attractive customer offering. In this paper the concepts of downsizing and downspeeding gasoline engines are explored while meeting performance needs through increased BMEP to maintain good driveability and vehicle launch dynamics. A critical enabler for the solution is adoption of gasoline direct injection (GDi) fuel systems. GDi provides the ability to utilize increased scavenging without sacrificing hydrocarbon emissions because fueling and air controls can be separated. In-cylinder injection with GDi also provides charge cooling benefit yielding the knock reduction necessary for turbocharged applications. Several options within GDi are explored including multi-hole and single pintle spray generators, as well as side-mount versus central-mount applications. Both 3-cylinder and 4-cylinder base engine configurations are explored for turbocharged engines downsized to 1.2 L. Improvements in hydrocarbon emissions, heat losses and scavenging favor fewer cylinders. This is re-enforced by packaging and cost considerations. The next system aspect considered is emissions aftertreatment. Stoichiometric turbocharged GDi provides the lowest cost using the established 3-way catalyst. Stratified GDi is expected to require a lean NO trap (LNT) and diesel Euro 6 systems require addition of a diesel particulate filter (DPF) and possibly NO aftertreatment. Although the aftertreatment system to meet Euro 6 NO requirement is not known today, addition of a DPF, DPF with LNT, or DPF with urea selective catalytic reduction (SCR) represent significant cost and packaging challenges. The analysis concludes by comparing the 3-cylinder turbocharged GDi to other offerings in the context of value tradeoff of CO₂ reduction to system on-cost. Stratified 3-cylinder turbocharged GDi systems offer up to 22% CO₂ reduction compared to a baseline port-fuel-injected 4-cylinder engine. CO₂ reduction of 18% is possible for a stoichiometric GDi mechanization that employs variable valve actuation (VVA) and a conventional 3-way catalytic converter. At Euro 6 emission levels, stoichiometric 3-cylinder turbocharged GDi powertrains offer excellent value. The 3-cylinder turbo-diesel offers similar value if it is capable of meeting the NO emissions standard without lean aftertreatment. Powertrains with higher engine-out NO levels that require lean aftertreatment are significantly disadvantaged. Based on the price sensitivity of the compact car segment, the value analysis predicts the 3-cylinder turbocharged GDi engine as the powertrain of choice.