Ignorance fought, thanks. My brain got lost thinking of transverse-mounted and longitudinally-mounted engines. Wrapped around the axle, so to speak. 
I believe that almost all of the above posts pretty well cover the increases in economy and horsepower. One thing that has been mentioned but not elaborated on, is the increased performance and economy due to transmission improvements. Here is a link, Installing the Last Automatic Transmission Your Hardworking Rig Will Ever Need , that shows what an improved transmission and torque converter can do on an older truck.
For those who don’t want to follow the link here it is in a nutshell. Old Ford F350 with a 7.3 ltr V8, diesel engine has a stock style transmission (4 speed overdrive with a lockup converter), The 8500 lb. dually truck averaged 11.5 mpg on the way to get the new transmission. On the way back, with a new Allison 6 speed with 2 overdrive gears, and a lockup converter the fuel economy was 19 mpg. No engine changes, and running 65 in top gear both ways.
I think the newer transmissions should get more credit than they do. They allow a vehicle’s engine to keep in a more narrow and economical powerband than the old 2,3,and 4 speed automatics could allow.
Mercedes Benz is about to release a new four cylinder engine, two liters in displacement, that produces 420hp.
This is for a car you will be able to buy, drive home, and do mundane things in, like go to the grocery store (it’s the CLA AMG45 by the way).
When I were a lad (late 70s into the 80s), a car with that sort of engine was maybe good for 120HP.
Amazing times we live in.
Wow. And, yeah, the late 1970s and 1980s were the dark times for engines and horsepower (due, at least in part, to the pursuit of better gas mileage, without the technological advances that came later). The base engine in the 3rd generation Mustang (1979-1993) was a 2.3 liter inline 4 cylinder, producing a whopping 86hp. Some of the Ford V8s of that era were only 120hp. :eek:
Weird… it calls for premium unleaded, but only has a compression ratio of 8.6:1. AFAIK, that low of a compression ratio should handle 87 octane just fine.
Another part of the equation is the much dreaded CVT, for lack of longevity it does actually work for power. I have 2 cars with the same HP rating and seem simular off the line, but when it comes to having to pass someone at highway speeds the one with the CVT is simply amazing of how much power it has over the geared one. It appears it gets into it’s power band and stays there the whole time pulling. That CVT also can keep a car in it’s most efficient range for the fuel use end of the equation.
I believe the reason for the low compression is it is turbocharged.
No kidding. My 2019 Toyota 4Runner takes 0 (zero) weight crankcase oil.
I had a .68 Mustang base model I restored to factory a few years ago. One of the things people don’t mention is - despite the long hood - how actually small they were. Smallish cab, low to the ground and so forth. The modern mustangs simply have a larger body.
And yes, the engine in a modern Mustang carries a lot more features. Not just safety features but new gear that wasn’t even conceived back then. I could open my hood and see the ground through the engine in my 68. That’s just not possible with modern cars. That new fuel efficiency and HP comes with increased engineering and more complicated systems.
And the HP? I had the inline-6 engine. It was 200ci and pulled 105 or so horsepower. My daily driver - a 2011 Cadillac CTS - pulls about 300 HP.
It has to be, to get that kind of power density.
For comparison, BMW’s S1000RR motorcycle has a naturally-aspirated 1-liter engine and can make 205 horsepower at 13,000 RPM.
The 2019 AMG CLA45 has a 2-liter engine and makes 375 horsepower at 6,000 RPM. So it’s making about the same horsepower per liter, but with about half the RPMs; that means it must be making about twice the torque per liter. The only way you can make that happen is with boosting (either turbo- or super-). And yes, the low compression ratio (on a current-model engine) is pretty much a dead giveaway that there’s boosting involved.
It’ll take me a while to read all these but I appreciate the responses.
What cars are you comparing if you don’t mind me asking? In my experience, CVT’s exist for one purpose: fuel economy. They aren’t robustly built enough, at least not yet, to handle oodles of power from musclecars and sports cars. Some of them are pretty dialed in with their software and are pretty convincing at fooling you into thinking it’s got planetary gears. Some are droning, dreadful rubber-bandy things that just piss me off when I drive them.
As far as the increases in power vs increases in fuel economy over the years, all the mentioned things are meaningful, but to my mind the most important ones are engine technology (direct injection, variable valve timing, etc), forced induction (turbo charging, super charging or sometimes both!) and transmission improvements are carrying the biggest load.
Heck, the Subaru STi makes 305hp with a 2.5L four banger with a big stonking turbo on it.
I do think that we’ve almost crested the apex in this regard though, as EV’s continue to get produced in ever-increasing numbers and eventually gasoline prices and societal pressures will force us all into EV’s at some point in the not too distant future.
Having just been through a Minnesota winter, the heat from the engine is used to keep the people in the car from freezing. That is NOT wasted! Also warms the lubricnts in the car, and powers the windshield defrosters.
But as far as using that heat in some way as motive power, I don’t know of any such efforts. Converting it to steam and that to motive power would take a lot of added work. And any such changes would require added parts, increasing maintenance and adding to the weight of the vehicle. Probably not worth it.
Possibly worthwhile would be an efficient way to convert heat into electricity, to charge the battery and power some of the electrical load (thus allowing a smaller & lighter battery).
Or make a fuel cell that’s economically viable that runs on gas and have the best of both worlds. Access to easily available fuel plus all the efficiency advantages of an electric drivetrain. 
There is the wave disk engine that is supposedly 60% efficient.
I don’t know if it’s feasible as the primary form of combustion but that seems like it could lead to sedans with 100 mpg.
This is a current area of development in Formula 1 racing right now. F1 cars are equipped with a hybrid power unit which has a system called the MGU-H (Motor Generator Unit - Heat) that harvests waste heat from the turbocharger and converts it into electricity. This energy is used to charge the battery, where it can be fed back into the drivetrain by way of the hybrid system, and also drives an electric motor that keeps the turbo spun up as necessary to eliminate turbo lag.
Technology developed in racing often trickles down to production cars eventually, but I don’t know of any road-going vehicle that uses such a system just yet.
I started a thread somewhere here on the SDMB about perhaps using the ICE engines waste heat to drive a [Sterling Engine](Stirling engine - Wikipedia engine.) Perhaps to drive a generator or some such thing. Numbers don’t seem go work though. Sterling engines rely on differences between cold, and heat. And they become thermodynamically balanced without removing heat from the cold side. I thought that air movement might do it.
Sterling engines are kind of brilliant in their simplicity.
Well, this has evolved into highly theoretical and possibly impossible pretty quickly.
Mass-produced passenger vehicles aren’t doing much of anything with the waste heat, other than providing “free” cabin heat during colder weather. The only interesting thing I can recall is the Toyota Prius, which used an insulated tank filled with wax to serve as a kind of thermal battery. When the engine ran, hot coolant would melt the wax, storing heat there. The next time the engine ran, coolant would flow through the tank, collecting heat and carrying it to the engine. This wasn’t really about efficiency though, it was more about warming the engine quickly to minimize cold-start emissions - although it had the added benefits of improving engine longevity and giving passengers cabin heat more quickly. I learned about ths a long time ago, and I haven’t been paying attention in recent years, but I suspect that a system like this is still employed by the Prius and probably by other hybrid-electric vehicles. An engine’s emissions are worst (by a long shot) when it’s starting from dead-cold, so when it comes to meeting emissions requirements, hybrid vehicles (which don’t run the engine much) need help with this.
You’re correct about most of the fuel’s energy being wasted as heat. I am very familiar with the specific case of the 2009 Ford Explorer. I happen to know the drag behavior (aero + tire rolling resistance) of this vehicle, and I can tell you that at 60 MPH, the total drag force is 162 pounds, which translates to a power requirement (at the wheels) of just 25.8 horsepower. The highway fuel economy rating for this vehicle is 21 MPG. Overall, this works out to an efficiency of 19.4%, measured at the wheels.
At higher speeds, the drag power requirement goes up, but since the engine is loaded more heavily, its efficiency improves; the net result is that your fuel economy doesn’t drop off as much as you might expect. at 80 MPH, the Explorer’s drag force is 245 pounds, 50% more than at 60 MPH - but the fuel economy economy doesn’t fall off by 1/3, it falls off by maybe 1/6 or less.
At lower speeds (e.g. cruising around town at 30-40 MPH), the engine is loaded very lightly, and the efficiency is even lower than 20% under these circumstances.