HIROSHIMA, Japan ??” Mazda said on Thursday that it has developed a new, normally aspirated MZR 1.3-liter Miller-cycle engine that will be used in the new Mazda2/Demio. The engine will be linked to Mazda's first continuously variable transmission.

Mazda says the new Demio, which goes on sale in the home market in July, will achieve a fuel economy of 54 mpg, an improvement of about 20 percent over the 45-mpg rating of the current model.

The new Miller-cycle engine means that the Demio gets Japan's green tax exemptions. Oddly enough, the automaker has not yet released output specifications. Normally, a supercharger is required in a Miller-cycle engine.

Mazda noted that in addition to the fuel-efficient powertrain, the new Demio is about 220 pounds lighter than its predecessor.

What this means to you: Mazda continues to think out of the box, from the new Miller-cycle engine to the hydrogen rotary engine.

Source: [url=http://www.edmunds.com/insideline/do/News/articleId=121045]Edmunds.com/Inside Line[/url]