Expect to see smaller engines for BMW’s and Volkswagen’s future models, as high fuel prices and greater environmental concerns are pushing buyers towards engines with lower displacements and carmakers would be foolish to ignore the trend. VW’s plans to introduce a new three-cylinder variant of the Golf appear to be going ahead, according the carmaker’s development chief Ulrich Hackenberg. As a part of this environmental push, VW will also introduce hybrid variants based on its TwinDrive technology.

The future of the three-cylinder engine for the Golf looks optimistic, with Hackenberg stating that the company is developing the engine further but that it has a "great future". He also mentioned the fact that the Golf could be fitted with some form of electric propulsion - although sales would likely be focused on "megacities in China and the U.S."

BMW, too, is looking to downsize to three-cylinder engines for its base models. Sources close to both companies revealed the plans to Germany’s Auto Motor und Sport. For BMW, its three-cylinder engine will first be used in the next-generation 1-series due in 2011. The engines are currently in a testing phase and are still about two years away from launch.

While BMW is yet to confirm the reports, the new three-cylinder engine will displace 1.35L and output between 120hp (90kW) and 180hp (135kW) in various guises. The carmaker is also expected to launch a new four-cylinder engine to replace many of its six-cylinder units, which will displace 1.8L and output up to 240hp (180kW).

BMW is considering bringing this four-cylinder engine to the U.S. and Mercedes Benz is also thought to be planning a similarly small engine for its C-Class in the U.S. as well. Drivability will be key to their success, and to ensure adequate performance twin-turbocharging and direct-injection technology will be essential.