Honda will unveil a low-cost city car concept at the Delhi motor show next month.
The car, which is expected to be built in India and Thailand, is currently being referred to as the "New Small Concept".
It will be sold in emerging markets, but Honda insiders have suggested it could be sold in the West
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 concept will be launched in Delhi on 5 January - the same time as Toyota's clow-cost city car, which is codenamed EFC, or Entry Family Car. It is expected to be given a different production name, however.
A production date and target price for the Honda city car will be revealed at the Delhi show.