The Ford Start concept car.

According to a recent article in the Detroit News, Ford has unveiled the next step in the ever increasing challenge to increase fuel economy; a new 3-cylinder engine and an eight-speed automatic transmission. The move comes following recent news that Chrysler has been adding 8 and 9 speed automatic transmission to it’s lineup as well.

The new 3-cylinder engine will be a 1-liter turbocharged engine intended for global use, which does include small cars in the U.S. Ford officials would not confirm that the engine itself would be built in the U.S., but did confirm that it will be built in several Ford locations worldwide. This engine was shown at the 2010 Beijing Auto Show in a concept car called the ‘Start.’

The eight-speed transmission embarks a new move for Ford as the transmission will be produced internally at Ford, not outsourced to a Japanese supplier as has previously been the case. Ford has invested $135 Million in the project, with dollars going to design, engineering, and manufacturing. The project has also created 220 news jobs for Ford internally. According the the Detroit News article, Derrick Kuzak, the head of global production development at Ford, stated that this transmission will be part of Ford’s 2009-2013 commitment to add 60 new engines and transmissions to their lineup.