How can a turbo engine be more fuel efficient?

A few weeks ago, I entered into a discussion with a couple of co-workers about the turbocharged engine in the Chevrolet Cruze Eco. When I put the words "turbocharged" and "fuel-efficient" in the same sentence, they pounced on me, sure that I was incorrect in with my facts.

Not having ready access to the Internet, I declared that I was 99.9 percent certain the engine was a 1.4-liter turbo. Which then brought on a question I was nowhere near prepared to answer intelligently: How can a turbo engine be more fuel efficient?
Since I'm not a gear head, nor do I want to be, my answer was: Well, it just is. 
Of course, that's like a parent telling a child: Because I said so. It wasn't a good enough answer for them, and it's not a good enough answer for me. 
So, I did a little digging and have a better answer. For you non-techy types who don't want to be bogged down with the details, the short answer is: The engine itself is lighter and more efficiently designed. 
Want a little more explanation? 

Well, smaller-displacement engines are naturally more fuel efficient because they don't consume as much fuel. Then you have the fact that the turbocharger itself is actually a fuel saving tool because it delivers on-demand power rather than the constant consumption of fuel for motivation. Combine both of those with well-geared 6-speed transmissions, and the fuel-efficiency package is complete. 

Or at least mostly complete. This is, of course, an oversimplification, and there are a lot of nitty-gritty details like variable valve timing, reduced engine vibration, variable-flow oiling system and dual-overhead camshafts that all figure into the overall fuel-efficiency equation. But it all boils down to a really great engine that is light, efficient and powerful.
Oh, and very fun to drive. When a passenger during the test week asked the horsepower rating, he wouldn't believe it was 138 until I showed him the paperwork. He could have sworn it was more than 300 horsepower. In combined driving, I averaged 34.4 mpg, which is higher than the EPA estimate and pretty good for a lead foot like me.
Still looking for more of an explanation? Well, you must be an engineer or a gear head, so please check out the GM press release with all the gory technical details.

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