With oil above $125 a barrel and potential financial penalties looming for vehicles that emit high amounts of carbon dioxide, making cars more fuel efficient tops the industry's agenda in Europe.
But while many talk of futuristic hybrids, battery power and hydrogen, many automakers and suppliers already have gotten serious about saving CO2.
Several smaller engines already are in showrooms, and more are poised for launch.
Volkswagen cannot build enough of its downsized 1.4-liter TSI gasoline engine. The automaker is telling new customers not to expect delivery before 2009.
Renault launched its new Laguna sedan and wagon in 2007 with a 1.5-liter diesel as the base engine. Similarly, a 1.6-liter diesel is the smallest engine offered on the new Citroen C5, a rival to the Laguna.
"Every company is going for smaller engines," says Andrew Fulbrook, senior analyst at CSM Worldwide in London. "Right now it's the most cost-effective way of reducing CO2 emissions."
Robert Bosch GmbH, the world's largest auto supplier, has a stake in nearly every key CO2 technology. Bosch sees smaller engines as cost-effective.