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This paper describes a new 1.2-liter three cylinder gasoline engine named HR12DDR, with the target to achieve the lowest level CO2 in the European B-segment market and also, to satisfy the customer's driving pleasure through high output performance. This engine is developed with the consideration of meeting further strict regulations in the years ahead and of the possibility of being an alternative powertrain of diesel in the future as well. As a first step this engine was applied on the European Nissan Micra in 2011; achieving 95g/km CO2 emissions(NEDC mode). This low fuel consumption was realized mainly through technologies which scope to maximize thermal efficiency with high compression ratio, and to minimize the mechanical friction loss. The combustion was optimized by Direct injection (DI)system. To obtain the better fuel economy performance without sacrificing high output, we chose the supercharger system with bypass valve and electromagnetic clutch.