Anticipating growing demand at home and in Europe, Japanese car makers are developing a new generation of one- to 1.5-litre petrol-fuelled vehicles.

Honda will soon introduce a new Logo with 1.3 litre engine while Nissan, Mitsubishi and Mazda plan to introduce new small cars with new engines from next year.

Approaches vary. Toyota, Daihatsu and Suzuki have already achieved high fuel efficiency and low emissions with variable valve timing and double overhead camshafts.

Honda is reducing costs by sticking with conventional single camshafts and is experimenting with spark plug locations to improve fuel efficiency.

Mazda plans to use a 1.3- and 1.5-litre direct injection petrol engines and high quality catalysts for the next Demio to be introduced in 2003 and built in both Europe and Japan.

For the next-generation March/Micra, due out at the end of the year and also to be built in both Japan and Europe, Nissan plans to co-operate with Renault to share major engine parts, including cylinder blocks.

Mitsubishi is also working on developing low cost and highly fuel-efficient small petrol engines.