160HP-180HP out of 360 cubic inches? That is as bad as a late 70-ies Corvette.
4 pistons the size of saucers running 2300rpm?
40l/hr at 120kts? That's 18.3 l/100km...atrocious.
You are comparing apples and oranges.
160HP-180HP? At what speed? Show me one modern car engine (even V12...) which can do 180HP at 2000rpm. They can do that at 5500 or even higher, at that speed the Lycomings can produce 350HP or more (ask the Reno-Guys...)
Going 120 kts (220 km/h) with a modern SUV is barely possible with 18.3 l/100km.
Compare comparable numbers please, but as stated before, SFC numbers for cars are hard to come by. Even l/100km values which are not just possible on special test stands with special tires, no A/C etc. but in real life are hard to come by.
Pistons may have the size of saucers, but look at their actual shape and contact area. It took the car industry up to the late 90s to produce pistons which are not just the shape of a tin can and optimized for cheap production, but optimized for weight, contact area, oil distribution, heat transfer etc. Modern car engines are now further advanced, even with some non-metallic anti friction coating in the highest contact force area, but that is a thing of the last 15 years.
Taking into account the typical speed of propellers, turbo charged direct drive diesels are most probably the way to go, but these machines are real propeller murders. The torque peaks ruin every blade root bearing... So unless we design some Propellers with elastomeric roots (similar to what the helicopter folks do) we will not get very far. Reduction gearboxes have also not proven too reliable yet, so modern high speed turbo charged direct injection petrol engines are also not that easily made.
There is not much doubt that the aera of high octane fuel is over. So somehow we must find a new way to power piston aircraft. Fast.
Maybe the club/flying school business will very soon move into electric aircraft, then the market for high performance long range aircraft will become a real challange, because it will be very, very small. And no market to develop a new engine for.