Automobile component particularly the engine cylinder is subjected to continuous wear during the running of the automobile specifically the two wheelers. Aluminium alloys are the material of choice due to their high strength/weight ratio. As aluminium alloys have poor wear and corrosion resistance, a uniform wear resistant composite coating is required on the bore of the internal combustion engine cylinder. There are several methods to produce composite coatings like chemical and physical vapour deposition, plasma spraying, metal infiltration, powder metallurgy etc. Ni-SiC coating commercially known as NIKASIL, is the most commercially used coating in automobile’s/aero IC engines. However, SiC tends to react with the nickel matrix at temperatures above 400 °C forming a brittle nickel silicide which deteriorates the performance of the coating. Also, the synthesis of SiC particles utilizes high energy. Present study provides an oxide namely Yttria Stabilized Zirconia (YSZ) reinforced Nickel-Cobalt based wear-resistant and fuel-saving composite coating replacing the existing NIKASIL coating used in automobile engines. The said wear-resistant coating was developed using simple electrochemical deposition method. The deposition conditions were optimized and the developed coating displayed a microhardness of 500 ± 30 KHN50gf. The wear loss of Ni-Co-YSZ coating was observed to be 6.7 × 10-7 mm3/m against EN31 hardened steel. A four-stroke automobile engine cylinder was coated with Ni-Co-YSZ coating and tested according to CS-22 standard up to the engine speed of 6500 rpm. The fuel flow in the Ni-Co-YSZ coated cylinder was nearly 10 % less compared to the uncoated engine cylinder. This shows that the Ni-Co-YSZ is a fuel-efficient coating.