Novel Engine Is Closer to Debut

RALPH SARICH has some not-so-modest ambitions. He expects his ``flea-size'' Orbital Engine Company of Perth, Australia, to sign a multimillion-dollar joint venture with a major United States automaker later this year, a deal that could mark the birth of the most unusual new engine design since the Wankel rotary debuted in the early 1970s.

The engines found in most of today's passenger cars and light trucks use a four-step process to generate power. First a gas-air mixture is drawn into a cylinder, which is compressed by a moving piston and then ignited. The burned charge is then forced out of the cylinder into the exhaust. The full cycle takes four strokes of the piston.

Some engines combine those functions into just two strokes of the piston. Such two-stroke engines have been around for decades, and were for many years especially popular on high-performance motorcycles. But they have typically been fuel inefficient, noisy, unreliable, and a source of unacceptable levels of pollution.

For several years Mr. Sarich, an Australian inventor-cum-businessman, has been tirelessly pitching a unique design that he claims eliminates the typical problems associated with two-stroke engines and solves some of the problems of the conventional four-stroke type.

Initial studies indicate the Orbital engine's emissions are lower than those of comparable four-stroke engines; fuel economy appears to be slightly higher.

Another advantage: The three-cylinder, 1.2-liter version Orbital design - which has been generating quite a bit of excitement in industry circles - weighs barely 200 pounds. It is so small that two could fit in the space of a comparable four-cylinder engine generating the same 95 horsepower. Because the new design uses fewer parts, Orbital officials claim it can be manufactured more cheaply than current engine designs.

``I challenge anyone to show us why that engine won't make it,'' says Sarich.

Nevertheless, he admits there are ``still some technical things to clean up.'' The Orbital engine still tends to be noisy and harsh in operation.

So far, Orbital has won a licensing agreement from the Ford Motor Company, though Ford has yet to make a commitment to put an Orbital engine into one of its cars. Similar arrangements have been reached with several boat engine manufacturers, including Outboard Marine Corporation, which markets products under the Johnson and Evinrude marques. But again, no production is under way.

That could soon change. ``We expect to make an announcement by the middle of the year for manufacturing,'' says Sarich. For the moment, Orbital officials are being tight-lipped about details. But insiders hint the likely partner is either Ford or General Motors Corporation.

If Orbital's plans materialize, an engine plant would go into production by 1993, turning out 250,000 two-stroke engines a year, enough to supply a typical assembly plant of subcompact cars.

The plant would cost about $300 million Australian (US, $240 million), says Ken Johnson, the company's negotiator. Orbital has been asking for a licensing fee in the range of A$30 to $40 an engine, he says. That fee, a well-placed industry source indicates, appears to be one of the sticking points in completing any of the deals now under discussion.

Orbital has yet to decide on a country for the factory, Mr. Johnson says.