When addressing the future, change is necessary. Some change, however, is resisted. Change is not always a good thing, unless we are talking about a rise in horsepower, of course.
Lets just rewind a few decades, to the 1980's. Honda, Volkswagen, Toyota, Subaru, and other imported cars were starting to introduce a new wave of passenger cars fitted with smaller, fuel injected 4-cylinder engines replacing larger carbureted 6-cylinder engines. Slowly, over the past 30 years we started to realize that there are ways to make engines produce more power, thus allowing us to make smaller engines that produce the same amount of power, all the while being cheaper to manufacture, more economical, simpler, and lighter. A few methods we see commonly are Turbocharging, Supercharging, the addition of a hybrid electric motor, and EFI (Electronic fuel injection) systems.
Genius wording for a Volkswagen Fuel Injection Advertisement in the 70s
This affected the market greatly. No longer do we need large carbureted V8 engines that achieve 15 mpg to push out 200 horsepower, in fact now in modern times we can get over 300 horses from a turbocharged fuel injected 4-cylinder! And still achieve 30+ mpg.
Our standards became higher for every engine type. We now can expect 4-cylinders to push heavy truck, sports cars, and most SUVs. We now expect V6 engines to be the optional engine, taking on the role of V8s and no longer being the base option. Modern V8s are now expected to be the pinnacle of power, used in heavy hauling, supercars, and overall an aging rarity that was once standard on many cars.
The new VW Jetta, with a 1.4L engine, replacing the 1.8L, but is more powerful.
Unfortunately, many people are not truly aware of how much things have changed. A lot of older folks are still hesitant to buy vehicles like the Ford Mustang Eco Boost, or the Chevy Silverado with a 2.7L Turbo 4-cylinder due to being under the impression that they are weak and are only just for mileage improvements, not along with power.
The new Silverado, under heavy criticism for its 4-cylinder engine.
All in all, modern engines will continue to decrease in size. It is simply part of it. However we can expect to see increases in power along with decreasing sizes, and that is something we can all agree to look forward to.