I'm hoping someone else remembers it and furnishes the title.
I was a kid when I read it, and the book was already old, so publication date circa 1970-80. Best I can do. I trawled through book cover images but no love.
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edit to add: It's probably "Auto Mechanics Fundamentals" by Stockel. I'm still looking for pictures of the insides of the book, but going by what I can see here, it's very likely:
I bought a copy of "Auto Mechanics Fundamentals" based on this thread and I think it is definitely the book you're remembering. The exploding can image you describe is on page 9 and the first chapter builds up an engine from first principles like you've talked about. Thank you for recommending this, it's a great resource!
Just going by description and the "red book" it seems like its Auto Mechanics Fundamentals:
>>> "It is the aim of Auto Mechanics Fundamentals to provide a thorough understanding of the design, construction and operation of automotive units. Each unit is approached by starting with basic theory, then parts are added until the unit is complete. By following this procedure, the function of each unit is explained, and its relationship to the complete car is made clear. Hundreds of illustrations were drawn especially for this text. Important areas are featured in these drawings, and many are exaggerated to place emphasis on parts being discussed. Unfamiliar words are defined immediately following the words. In addition, the Dictionary of Terms in the back of the book defines more than 1,100 terms..."
I just previewed a few pages from "How Cars Work", and it listed this 'money saving tip' that I found pretty funny: "Don't ... make eye contact with police officers while driving"