Still only 8 in 1,000 people in India own a passenger car. In China, it is about 20 per 1,000 but in Japan and the United States, it is at least 450 cars per 1,000.

Every day, about 17,000 private vehicles are being added to already congested Chinese roads, while Indian passenger vehicle sales are expected to rise by almost 50 percent during the next three years.

Such explosive growth will demand a rethink by automakers. "Over the next 5 to 10 years, technology, moral pressure, regulatory pressure and high oil prices will push even premium carmakers into making changes to their engines," said Steve Howard, chief executive of The Climate Group in Britain.

India is at the forefront of the move to low-cost cars and is doing its best to promote their green credentials.

The Indian motorbike maker Bajaj Auto says its $2,500 car, which it is building with Renault and Nissan Motor, will aim at a fuel efficiency of 30 kilometers a liter, or twice an average small car, and carbon dioxide emissions of 100 grams a kilometer, or 13 grams a mile.

That would make it far superior to cars even in the European Union, which wants to bring down carbon emissions to 120 grams a kilometer from 2012, and the 180 grams in India, said the managing director, Rajiv Bajaj. His venture will have an initial capacity of 400,000 units, while Tata expects eventual demand of one million Nanos.

Rival carmakers including Fiat, General Motors, Ford Motor, Hyundai and Toyota Motor have all expressed interest in building a small car that is affordable to more middle-class consumers in emerging markets.

"Growth is in the emerging markets, and the bulk of demand there is for small cars because people are much more sensitive to fuel prices," said Arora of JD Power.

But not everyone is sold on the Nano. Honda Motor, the world's biggest motorcycle maker, is notably cool on the likes of the Nano.

"I don't see the draw of that kind of car," Takeo Fukui, chief executive of Honda, said recently in Tokyo. "In India, the roads are so congested that it's easier and quicker to navigate the traffic on a two-wheeler."

Honda and Toyota are leading the way on cleaner gasoline-electric hybrids, and some environmentalists argue that getting prices down on these technologies is where efforts should be concentrated.

GM expects to introduce its plug-in hybrid Chevrolet Volt in 2010.

Renault and Nissan are building an electric car for Israel that will be subsidized by the government and which Carlos Ghosn, the chief executive, has said would be the most environmentally friendly car to be mass produced.