In heavy duty vehicles, a higher boost and/or smaller sized diesel engine is quite effective in achieving fuel economy. However, this causes an increase of pumping loss due to increased intake air and exhaust gas flow of the engine at high load and high speed conditions. It also causes a relatively poorer torque at low speed conditions due to a lack of boosted air. The authors investigated the pumping loss and volumetric efficiency of a high boosted turbocharged diesel engine and analyzed the effects of the turbocharger, inertia charging and the valve opening areas. An optimization of small geometry turbine housing was obtained for the improvement of both low speed torque and fuel economy. The effects of inertia charging were ascertained from the relation between engine valve timing and the amplitude and phase of intake air pulsation. Increasing the intake and exhaust valve opening area improved fuel consumption by reducing pumping loss. The combination with the best selection of a turbocharger, the control of the inertia charging system and the increased valve opening area achieved higher low speed torque and better fuel economy.