Development trend of modern HSDI diesel engine is now focusing on low fuel consumption and emission because of strong interest in global environmental protection. Two big branches of criteria for modern diesel engine development are down sizing and down speeding. Down sizing keeps engine operation condition to the direction of higher load and thus pursuing for better thermal efficiency. But this may cause degraded vehicle dynamic performance because of reduced back up torque. Down speeding keeps engine operation condition to the direction of slightly higher load and lower engine speed. Therefore reduction of back up torque can be limited within flat torque area. This study analyzed fuel economy effect of down speeding on a vehicle powered by HSDI diesel engine in aspect of engine friction work, intake and exhaust pumping work, exhaust hat loss and thermal loss of fuel leakage of fuel injection system. Contribution factor of each engine and vehicle related parameters under basic and down speeding condition were compared and work balance of down speeding during NEDC was analyzed.