Nissan and General Motors are jumping on the bandwagon to develop smaller, more fuel-efficient cars.

Nissan said it has identified India as one of the five-low cost countries in which to manufacture its new concept car, the next-generation Micra.

Meanwhile, General Motors has officially announced the closure of four pick-up truck and sports utility vehicle factories, while at the same time announcing a new small car with fuel efficiency of 45 miles per gallon. .

GM's move was taken as the automobile company faced a fall of 28 per cent in sales, compared with a year earlier. It's not the only one: all major US automobile companies, including Chrysler and Ford, have experienced similar falls in sales.

Repeated increases in fuel prices are reckoned to be the main reason for the upsurge in popularity of these small vehicles. Honda, known for its fuel efficient cars, has enjoyed a 36 per cent increase in car sales this year.

The announcements will increase competition in the small car market, until now dominated by Japanese and Korean manufacturers. It remains to be seen whether any of these auto majors can beat Tata on pricing. X