Wolfsburg, Germany - Volkswagen is working on plans to build a new cheap mid-engined sports car that is scheduled to be presented at the Los Angeles Auto Show in November, Germany's Auto Bild newspaper reports.

Drawings published by the newspaper show a car with large wheels and a long wheelbase.

Four cylinder engines with an output between 77 kW/105 hp and 118 kW/160 hp were possible for the lightweight car with a body weight of under 1,000 kilogrammes. Several components such as steering, brakes and electronics would probably come from standard VW vehicles to bring down the price, the report said.

Tractor major Mahindra & Mahindra (M&M) has decided to invest $26 million

Berlin - Japan's N

Sydney - Tariffs on imported cars would be halved to 5 per cent if Prime Minister Kevin Rudd accepts the recommendations of a panel he appointed to study Australia's domestic automotive industry.

The budget for building a "green car" locally would double to 1 billion Australian dollars (880 million US dollars), Industry Minister Kim Carr said Friday when releasing the report.

"The Rudd Labor government firmly believes that there is every reason to be optimistic about the future of the nation's automotive industry if the right policy decisions are made now," Carr said.