*mercruiser 3.7l Head 4 Cylinder on 2040-parts.com

VW reveals plug-in diesel hybrid concept, claims 261 mpg

Volkswagen has used a car show in the Middle East nation of Qatar to unveil a two-seat plug-in hybrid concept car that the automaker says will deliver 261 mpg. The VW XL1 uses a lithium-ion battery pack, an electric motor and a two-cylinder, 0.8-liter diesel engine for the powertrain. We're still digesting the press release, but here are some highlights: -- VW says the XL1 can travel about 22 miles on electricity from the battery pack.

U.S. seeks 5 percent annual fuel-economy gains through 2016

The Obama administration today proposed gasoline mileage and greenhouse-gas pollution standards for new vehicles for model years 2012 to 2015, filling in the blanks for manufacturers en route to a 35.5 mpg national target in 2016. The Transportation Department and EPA proposal calls for fuel economy to increase by about 5 percent each year, starting from an average of 27.3 mpg for the 2011 model year, the agencies said in a statement. The average car buyer would save more than $3,000 in fuel costs over the life of a vehicle, the statement said.

Audi RS3 is revealed, packs 340 hp

WITH VIDEO -- Audi has finally come clean on its RS3 Sportback, revealing photos and information about the four-door hatchback planned for European sale next March. The RS3 uses a turbocharged 2.5-liter inline five-cylinder direct-injection gasoline engine borrowed from the TT RS. The RS3 Sportback will not come to the U.S.