In order to adapt to energy security and the changes of global-scale environment, further improvement of fuel economy and adaptation to each country’s severer exhaust gas emission regulation are required in an automotive engine.To achieve higher power performance with lower fuel consumption, the engine’s basic internal design such as an engine block and cylinder head were changed and the combustion speed was dramatically increased. Consequently, stroke-bore ratio and valve layout were optimized. Also, both flow coefficient and intake tumble ratio port were improved by adopting a laser cladded valve seat.In addition, several new technologies were adopted. The Atkinson cycle using a new Electrical VVT (Variable Valve Timing) and new combustion technology adopting new multi-hole type Direct fuel Injector (DI) improved engine power and fuel economy and reduced exhaust emissions. Variable cooling system with an electric water pump and Flow Shut Valve (FSV) improved fuel economy by reducing warm-up time and mechanical losses. Also, a newly developed variable oil pump has significantly reduced friction losses.By implementing these new technologies, the new naturally aspirated 2.5L gasoline engine achieved over 40% thermal efficiency and over 150kW engine power. In combination with a new 8 speed Automatic Transmission, fuel consumption was reduced by over 16%.