Toyota revs up its internal combustion engine E-mail Tweet Facebook Google Plus Linkedin Share icons by Megan McCarthy @FortuneMagazine July 22, 2014, 5:11 PM EDT Toyota stole a march on the global automotive industry by popularizing gas-electric hybrid engines, using its Prius brand to highlight the technology. But now that the Prius and hybrids are permanent fixtures in the automotive lineup, Toyota has decided it has some catching-up to do in the category of conventional gasoline engines Automakers like Nissan and Mazda are highly competitive in fuel efficiency ratings, using smaller, lighter powerplants to score high with consumers and governments. According to reports in the trade press, Toyota will narrow the gap shortly with two new engines that will be available in 14 variations around the world through next year. The first example has appeared in Japan, a hatchback known as Passo, powered by a 1.0-liter engine. Fuel efficiency in this model supposedly has been improved by 30 percent. For more than a year, the automaker has been touting a program it calls Toyota New Global Architecture (TNGA), that includes a number of automotive innovations, including engines. First off will be a 1.3-liter four-cylinder and a 1.0-liter three-cylinder that employ several advanced processes that improve fuel efficiency, including one known as an Atkinson burning cycle. Engines using the Atkinson technology previously had been used only in Toyota’s gas-electric hybrids. Toyota is following in other carmaker’s footsteps. Honda has introduced a line of high-efficiency engines it calls Earth Dreams, while the Mazda’s is called Skyactiv. (Nissan, with its Leaf, has made itself into a leader in battery-powered cars.) All are using technologies such as fuel injection and turbo charging to improve efficiency – sometimes at the expense of power or torque – and thus comply with increasingly stringent rules in the U.S. and abroad governing carbon emissions. “We would like to achieve No. 1 performance in fuel economy and cost for all the engines that we will be developing,” said Koei Saga, senior managing director in charge of engine and transmission development, in an interview with the Automotive News at Toyota’s global headquarters. Saga referred to the Japanese word kanzashi, a kind of ornamental hairpin to describe “add-on” technologies, such as recirculating exhaust from the engine to generate more power without burning more fuel. “We have a wide variety of kanzashi,” Saga told Automotive News. Since redesigning engines and incorporating technology require substantial capital – Toyota hasn’t clarified how much – the cost must be recouped by saving elsewhere. Published reports suggest that Toyota will accomplish this feat by creating more common parts among engines. As the gasoline engines improve, so will the gas-electric hybrids that use them in tandem, said Andrew Coetzee, a Toyota spokesman. “Our engineers are excited,” he said, “and very eager to put every innovation on the road as fast as possible.” Full expression of TNGA, including redesigned suspensions and other systems that improve handling and drivability, may not be apparent in the U.S. for another two to three years, when Toyota is expected to introduce its newest generation Camry. Meantime, expect to see a spate of engines featuring higher fuel efficiency from Toyota, along with incremental improvements in other redesigned parts. The No. 1 automaker from Japan doesn’t intend to give up its title easily, and doesn’t seem content to sit in idle while competitors like Volkswagen AG races ahead.