More recently Orbassano has worked on a new generation of smaller turbocharged engines (T-Jet) that offer the same performance than a regular engine, while using 25 percent less fuel and spewing fewer emissions. Fiat announced that they want to take this technology to the limit and has announced a 0.9-liter two-cylinder engine for 2009-10 which could replace its 1.4-liter units.
Orbassano is also investigating weight reduction, things such as drive-by-wire systems for steering wheels and brakes (accelerators by wire have been present for a while), LED lights or even the very impressive "shape memory alloys" of nickel and titanium. A spring extended seemingly beyond breaking point, for example, will curl right back to its original form when heat is applied. So a piece activated by a heating current could replace all the rods and motors that power locking mechanisms, cooling vents and mirror adjusters in a car.
[Source: Financial Times (h/t to Mark for the tip)]