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Downsizing and Turbo Charging (TC) and Direct Injection (DI) may be combined with Variable Valve Actuation (VVA) to better deal with the challenges of fuel economy enhancement. VVA may control the load without throttle; control the valve directly and quickly; optimize combustion, produce large volumetric efficiency. Benefits lower fuel consumption, lower emissions and better performance and fun to drive. The paper presents an engine model of a 1.6 litre TDI VVA engine specifically designed to run pure ethanol, with computed engine maps for brake specific fuel consumption and efficiency. The paper also presents driving cycle results obtained with a vehicle model for a passenger car powered by this engine and a traditional naturally aspirated gasoline engine. Preliminary results of the VVA system coupled with downsizing, turbo charging and Direct Injection permits significant driving cycle fuel economies.