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Honda has unveiled a low-cost city car concept at the Delhi motor show.

The car, which is expected to be built in India and Thailand, is currently being referred to as the "New Small Concept" and being built under the codename '2CV'.

Honda has said only that it will be powered by "a small engine", but sources sugest it will be offered with 1.0-litre and 1.2-litre petrol engines.

Honda Small car Concept - official pictures

Honda has committed to selling the car in emerging markets "before 2011", and insiders have suggested a modified version could be sold in western Europe after that.

The new Nissan Micra is being developed in much the same way; it is the first car to be built on a new global small car platform, designed to be cheap enough to build and sell in developing markets but also sophisticated enough for Western Europe.

The Honda will cost around £6800 and be a rival for cars including the Micra, Toyota Etios and Maruti Swift.

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