On Easter Sunday in 2001, Carmelo Scuderi called his family together in his home here and announced, essentially, that he had outsmarted the world's auto makers and their billion-dollar research departments.

The retired engineer and inventor told his children and grandchildren he had developed a dramatically more fuel-efficient design for the internal combustion engine, something car companies have been chasing for decades.

Eight years later, the late Mr. Scuderi's revelation no longer seems as far-fetched. His design — which involves grouping an engine's cylinders in pairs, with each pair focusing on specific tasks — is gaining attention in an auto industry that is now more open to fuel-saving innovations.

Click here for VIDEO of the Scuderi engine in action

A half dozen or so car makers, including France's PSA Peugeot Citroën SA and Honda Motor Co. of Japan, have signed nondisclosure agreements with the Scuderi Group, the company founded by Mr. Scuderi's family, to be able to study the technology closely, said consultants who are working with the firm. Daimler AG of Germany and Fiat SpA of Italy also are looking at the Scuderi design, executives at those companies confirmed.

"We have looked at their simulations and their [research] papers and it is worth looking into further," said a Daimler scientist familiar with the matter. "There is realistic potential here."

Honda declined to comment.

Robert Bosch GmbH, a giant German auto supplier with expertise in engine components, is developing parts for the Scuderi prototype, with the hope the engine will someday make it into production.

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On Monday in Detroit, the Scuderi Group, owned by Mr. Scuderi's wife, five sons and three daughters, unveiled a prototype engine, the next step toward proving that the design works.

The Scuderi engine still needs to pass many tests. Auto companies are bombarded with designs for new engines, and almost all never pan out. In fact, the basic design of the gasoline engine has remained largely unchanged for a century.

But the race to improve fuel economy has heated up because of volatile gasoline prices, increased interest in reducing oil imports and the phasing in of tougher fuel-economy and emissions standards.

Car makers worry it will cost billions of dollars to perfect new technologies, like electric cars and hybrids, to cut fuel consumption. They could eliminate much of that expense if they could improve the tried-and-true internal combustion engine.

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One answer could be a technology called HCCI, which yields a gasoline engine that operates much like a diesel, requiring no spark plugs. Honda, General Motors Corp. and others have invested in HCCI. The Scuderi engine is another possibility.

Today's gasoline engines leave much room for improvement. Only about a third of the chemical energy contained in a gallon of gasoline is converted into mechanical energy that turns the wheels of the vehicle. The rest becomes heat or exits the tailpipe as unburned fuel.

Mr. Scuderi was an expert in thermodynamics, which examines the relationship between mechanical motion, friction and heat.

In a normal engine, a piston moves up and down in a cylinder in a four-stroke cycle — down as a mixture of air and fuel enters the cylinder; up to compress the mixture; after a spark ignites the fuel, the piston is driven back down in the power stroke; and then up again, pushing out exhaust gases and starting the cycle over.

In the Scuderi design, pairs of cylinders work together. One cylinder does nothing but intake and compression. It is partnered with another that does only combustion and exhaust. A high-speed valve channels the pressurized fuel-air mix from the compression cylinder to the combustion cylinder.

Mr. Scuderi envisioned putting two sets of paired cylinders together to make a four-cylinder engine. According to his calculations, this setup should reduce resistance within the engine, result in greater compression of the fuel and air, and faster and more complete burning of the mixture.

Mr. Scuderi calculated that these and other changes could convert about 40% of the energy in gasoline into mechanical energy.

Click here for more on this story from The Wall Street Journal