Next year, Mazda will sell a car in Japan that gets 70.5 miles per gallon (mpg), or 30 kilometers per liter. The fuel economy rating won’t be nearly this good in the United States because of differing requirements, but even so, the car will likely use about as little fuel as a hybrid such as the Toyota Prius–without that car’s added costs for its electric motor and batteries.

The Mazda, a subcompact called the Demio in Japan and the Mazda 2 elsewhere, will include a package of changes that improves fuel economy by about 30 percent over the current model. These include a more efficient engine and transmission, and a lighter body and suspension. The Mazda 2, and a range of new cars from other automakers that have been engineered to meet more stringent fuel economy standards, demonstrate what some experts have been saying for some time–internal combustion-powered cars are far from outdated. Indeed, improvements to gas-powered cars can reduce worldwide fuel consumption more quickly than introducing hybrids or electric vehicles, because variations on traditional engines tend to be less expensive and can be quickly implemented on more cars.

“We’ve been making engines for 100 years, and we keep figuring out how to make improvements in them. We will continue to figure out further improvements,” says Greg Johnson, the manager of Ford’s North American powerpacks. “For another 50 years, if not more, the internal combustion engine will be the primary driver.” This week, Ford announced changes to its Focus model that improve its fuel economy by about 17 percent, to an estimated 40 mpg.

Mazda says the biggest source of improvement for the Mazda 2 is a new engine that compresses the fuel-air mixture in the engine far more than conventional gasoline engines do. Ordinarily, gas engines have about a 10-to-1 compression ratio. Mazda increased this to 14 to 1, a level typically seen only in diesel engines. Increasing compression has long been known to increase efficiency, but compressing the fuel-air mixture too much causes it to ignite prematurely–before the spark sets it off–a phenomenon called knocking. That decreases performance and can damage the engine. Mazda has introduced innovations to avoid knocking.

As a number of automakers, including Ford, are doing, Mazda has introduced direct injection–which involves spraying fuel directly into the engine’s combustion chamber rather than into an adjacent port. Doing this cools the chamber, which helps prevent premature ignition. Mazda also modified the exhaust system–increasing the length and shape of the exhaust pipes to allow more exhaust gas to escape after combustion. Removing these hot gases also keeps the temperature down, but it has the drawback of interfering with emissions controls. That required other changes in the engine, including modifying ignition timing and the shape of the pistons.

Mazda also found that above a certain compression ratio, some of the bonds in gasoline molecules begin to break, generating heat. These reactions increase the total amount of energy released from the gasoline, improving efficiency, the company says. To take advantage of this phenomenon, the engineers set the ignition timing to occur after these bonds start to break.

Just as important for improving fuel economy were a new transmission and a redesign of the frame to use less steel, or to use lighter, high-tensile steel. Mazda also says it redesigned the suspension system to make it lighter without sacrificing performance. Mazda has also announced a diesel engine that could be about 20 percent more efficient than the new gasoline one.

The 70.5 mpg rating the car received in Japan isn’t a clear indication of what Mazda 2’s rating will be in the United States, which has different test procedures, safety requirements, and emissions requirements. The current version of the Mazda 2 was rated at 54 mpg in Japan, but only 35 mpg (for the manual transmission version) in the United States. Michael Omotoso, manager of the power train forecasting group at J.D. Power and Associates, estimates that the new car could be rated between 50 and 60 mpg in the U.S., giving it a chance to eclipse the 51 mpg rating of the Prius (which gets 48 mpg on the highway).

Mazda will introduce the new engine and transmission in a number of vehicles next year, although it has not announced the specific models, or when the new Mazda 2 will be available in the United States. The new engine and transmission will be introduced in the United States next year in a larger car that will get about 43 mpg.

Although the new Mazdas avoid the costly motor, power electronics, and battery pack required in a hybrid, the improvements will likely add to the cost of the cars. Volkswagen recently introduced an 83-mpg diesel vehicle that wasn’t successful because of the high costs of achieving these fuel economy levels, Omotoso says. Mazda hasn’t announced prices yet. “I would think they learned a lesson from Volkswagen,” he says.