I have read the claim that modern automatic transmissions cut fuel to the engine on downhill stretches, thereby making it more fuel efficient to go down a large hill in drive than in neutral. However, I have found in my own experimentation with a vehicle that shows current fuel consumption (in the form of the instantaneous mpg) that is is not always the case and fuel will actually be injected at certain times when going downhill, apparently when it detects engine drag is slowing the vehicle down too much.
When no fuel is being injected a significant braking drag is acting on the vehicle. When going downhill there is a slight but noticeable lurch when fuel injection begins as this braking drag goes away. While this drag is good for the highway where for example you might easily maintain the speed limit and even need a touch of brakes on long hills, for city driving it can result in a substantial decrease in fuel economy. In an experiment I performed, I found that fuel economy could be improved around 10% by always shifting to neutral for downhill stretches for which this would not result in exceeding the speed limit by more than 5mph. This is not insignificant - if everybody driving in the U.S. increased their fuel economy by this amount it would save close to 40 million gallons of fuel per day. (source) Of course, actual fuel savings probably won't be as large for everybody as it is for me - it seems to help to live in a hilly area or drive a lot of stretches where it's downhill enough to maintain speed coasting but not with the transmission engaged, and it applies mostly to city driving - but it seems like there is still enough savings that it would more than pay for engineering time to developing an improved transmission program.
So I am wondering why automatic transmissions aren't designed to automatically select neutral when it would be more fuel efficient to do so? I don't think concerns about the safety of driving in neutral could be the issue, as since it's under computer control the car can automatically shift back into gear the moment the brake is pressed or the accelerator is pressed enough to overcome what would be engine braking - the car is already smart enough to automatically kill the gas if you enter neutral while cruise control is on, for example. Has nobody thought of this before or just don't care to make it better? Are there serious downsides I am not seeing?
Update: I'm going to do a more formal measurement as soon as I get a chance here. Informally I took a couple of data point on my way home on a downhill stretch started off mild <1% and increased to >6%.
1200 rpm, speed ~35mph, MPG=62
1500-1800 rpm, speed ~40mph, MPG=87
at this point I hit the steep part of the hill and hit the button on the side of the automatic so it would engine break harder
2000 rpm, speed ~48mph, MPG=150 (this is pegged, at this point I believe no fuel is being used)
So this seems to refute the assertion that "When you take your foot off the gas pedal and the engine is ~1500-2500, the ECU will cut fuel completely to the engine." One other data point, if I am coasting and the engine is at idle, I find that MPG is always twice my speed (in MPH) indicating that at idle I am burning 1/2 gallon per hour. So getting 87MPG at 40mph is barely doing better than idle, and going 35mph it is actually worse.