At partial load, traditional automotive gasoline engines have high pumping losses due to the throttling of the intake charge for load control. Variable Valve Timing (VVT) and the introduction of externally cooled EGR could reduce the pumping losses but only with a very limited effect. On the other hand, in the medium to full load range, the engine cannot utilize a high compression ratio due to limitations in knocking. A variable displacement, variable compression ratio device which utilizes an asymmetric camshaft to realize the different closure times of the two intake valves is discussed in this paper. The large-scale change in the intake valve timing leads to the large-scale change in the effective cylinder volume at the intake valve closure, which realizes a variable cylinder volume and a variable effective compression ratio. The device is utilized to reduce the pumping losses and to increase the in-cylinder thermal efficiency at the same time. Engine dyno test results indicate that, in the low to medium load range, a later closure of the intake valve could reduce the effective cylinder volume, and the intake pressure could be significantly increased, and therefore pumping losses reduced. However, the reduced effective cylinder volume due to a later intake valve closure would lead to reduction in the effective compression ratio (ECR) and a drop in in-cylinder thermal efficiency. Therefore, there is a balance point between the pumping loss reduction and the drop in in-cylinder thermal efficiency. On the other side, in the medium to full load range, when avoiding knocking becomes the major controlling factor of the combustion phasing (degree of constant-volume combustion) and the effective expansion ratio (EER), too high of an effective compression ratio would lead to significant drop in the effective expansion ratio EER and also the in-cylinder thermal efficiency. Therefore, there exists a best compromise between the ECR and EER, and the best system would be one with a moderate ECR but an EER as high as possible. The quantitative equations which include both ECR and EER in the thermal efficiency calculations captured the above observations pretty well and can be utilized to optimize for the best compromise of IVC, EVO, ECR, EER and engine performances during the concept stage and/or the calibration stage of an engine.