Carmakers must adapt or die in the struggle to compete against new budget vehicles made in India and China, the head of the Renault-Nissan alliance said yesterday.

Carlos Ghosn, the chief executive of both the French and Japanese carmakers, said that the emerging economies were the “new challenge”.

“The world should build vehicles with the same frugal mentality of the Chinese and the Indians — it’s a matter of survival,” he told Veja, a Brazilian magazine.

The interview came at the start of the North American International Auto Show in Detroit, which celebrates its centennial this year. In the interview, Mr Ghosn pointed to the recent launch by Tata, the Indian conglomerate, of a four-door car with a retail price of $2,000 (£1,030).

Some companies would disappear, he said, giving warning that “there’s no room for complacency’’.

The Renault-Nissan partnership holds a near-10 per cent share of the global market. Renault owns 44.4 per cent of Nissan, which owns 15 per cent of its French partner.

Elsewhere at the car show, General Motors unveiled a hybrid electric car called the Chevrolet Volt. It is designed to run for 40 miles purely on electric power, but the technology to build its battery will not be ready for two to three years, GM said.

Chrysler said that it would produce a minivan for families in which the second-row seats would swivel 180 degrees to face the third row, with a table in between for card games.

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