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A highly efficient new 2.8-liter inline 4-cylinder diesel engine has been developed in response to growing demand for diesel engines and to help save energy while providing high-torque performance. Engine efficiency was improved by reducing cooling loss based on an innovative combustion concept applied across the whole engine. Cooling loss was reduced by restricting in-cylinder gas flows and improving combustion chamber insulation. To prevent the restricted gas flows from affecting emissions, a new combustion chamber shape was developed that increased air utilization in the cylinder through optimizing the in-cylinder fuel distribution. Combustion chamber insulation was improved by a new insulation coat that changes the wall surface temperature in accordance with the gas temperature. This reduces cooling loss and avoids the trade-off effect of intake air heating.