Toyota is readying a low-cost vehicle for sale in emerging markets but rival General Motors Corp. says a $2,500 car such as the Nano model rolled out by Tata Motors of India last week is not in its immediate future.

“I wouldn’t say that right now we have been specifically enamored of the $2,500 price point,” GM chief executive Rick Wagoner said in an interview in Detroit Monday, adding “the magic” price for an ultra budget car is yet unknown.

GM’s strategy for the low end of the market will be to try to take costs out from existing vehicles such as the ones built by its GM Daewoo unit in Korea, Mr. Wagoner said.  GM has tried before to make a cheapo car from scratch, trying to cut costs by using coloured plastic panels, for example, instead of painting the cars later on. Overall, the effort hasn’t worked, he said.

“What we ended up with was not a very good looking car that wasn’t that cheap,” Mr. Wagoner said.

GM and Toyota are battling for the title of world’s biggest automaker by sales. Emerging markets are crucial for the automakers as growth in North America, Europe and Japan slows.