DETROIT — The world's two largest automakers are working on ultracheap cars to sell in emerging markets and possibly compete with the $2,500 subcompact unveiled last week by India's Tata Motors Ltd. — but whether they can match the price remains in question.

During the North American International Auto Show in Detroit, top executives from General Motors Corp. and Toyota Motor Corp. said their companies' engineers are working on low-cost vehicles similar to Tata's Nano.

"There is a huge market for low-cost/price vehicles," Toyota President Katsuaki Watanabe told reporters this week.

Such a vehicle would have to meet Toyota quality standards, Watanabe said, and building a car to sell for $2,500 might be difficult.

"To do that properly is very important," he said.

GM has bolstered its engineering staff in India to around 1,000 and also has been working on a low-cost car in other parts of the world, Jim Queen, group vice president of global engineering, said in an interview.

GM's Chinese mini-vehicle joint venture, SAIC-GM-Wuling Automobile Co., already is building a car that sells for around $3,500, Queen said, calling the Tata vehicle an impressive way of meeting demand in emerging countries.

"I want to keep learning more about it," Queen said. "We've got a lot of, I'll call it technical work, that's been under way for some time in order to achieve a vehicle in that class."

Queen said GM could match the Tata vehicle, but it needs to better understand the business case for it before rolling one out.

"We are working on our lower-cost architecture to try to see if we can come up with lower-cost versions," GM Chairman and Chief Executive Rick Wagoner told reporters.

The cheapest new car currently sold in the U.S. is a version of the 2007 Chevrolet Aveo at $9,995, according to the Edmunds.com automotive Web site.

The basic Nano, the world's cheapest car, is expected to roll off assembly lines later this year. It will sell for 100,000 rupees, or about $2,500, but analysts estimate customers could pay 20 percent to 30 percent more to cover taxes, delivery and other charges.

The basic version has no radio, passenger-side mirror, central locking or power steering, and only one windshield wiper. Air conditioning is available only in deluxe models.

The Nano has a two-cylinder 0.6-liter gasoline engine with 33 horsepower, giving it a top speed of about 60 mph, according to Tata. It gets 50 miles per gallon.

For now the car will be sold only in India, but Tata said it hopes to export it in two or three years.