The new Beijing Automotive Industry Corporation (BAIC) engine, an evolution of the 2.3L 4-cylinder turbocharged gasoline engine from Saab, was designed, built, and tested with close collaboration between BAIC Motor Powertrain Co., Ltd. and Southwest Research Institute (SwRI®). The upgraded engine was intended to achieve low fuel consumption and a good balance of high performance and compliance with Euro 6 emissions regulations. Low fuel consumption was achieved primarily through utilizing cooled low pressure loop exhaust gas recirculation (LPL-EGR) and dual independent cam phasers. Cooled LPL-EGR helped suppress engine knock and consequently allowed for increased compression ratio and improved thermal efficiency of the new engine. Dual independent cam phasers reduced engine pumping losses and helped increase low-speed torque. Additionally, the intake and exhaust systems were improved along with optimization of the combustion chamber design. A low-inertia, high-efficiency turbocharger was matched to recover waste heat and achieve the desired engine performance. A high speed combustion concept was introduced, including upgraded intake ports, a high energy ignition system, and fuel injection matching improvement. These changes allowed the achievement of greater combustion efficiency. Friction reduction technologies were applied to the piston, piston pin, ring pack and engine front end accessory drive (FEAD) system, and to the bearings of the engine balance shafts. A high-efficiency water pump was also applied to further improve mechanical efficiency. With the application of all the aforementioned technologies, the new BAIC engine achieved an overall fuel consumption reduction of 10 - 11%, and up to 15% improvement at high load conditions. A maximum brake thermal efficiency (BTE) of 37.4% was obtained, along with a peak torque level of 345Nm between 1900rpm to 4000rpm.