...and Mercedes-Benz has more to come with an Estate diesel arriving in September with the C63 AMG Estate. For the moment buyers will have a single engine choice, the proven supercharged 1.8-litre four-cylinder wearing the C200 Kompressor badge.

Price premium for the Estate is $1800 above the equivalent sedan model, making it $58,890.

From September the 2.1-litre C220 CDI turbodiesel four-cylinder Estate will carry a $63,100 sticker, while the AMG version will land at $141,300 with the same 336kW and 600Nm 6.2-litre V8 from the sedan.

The V6 C280 Estate — already on sale in European markets — could be added next year.

Mercedes sold 706 C-Class sedans in April, 300 more than Audi's A4 and almost double the number 3 Series sedans moved by BMW.

The C200 Kompressor develops 135kW at 5500rpm and 250Nm at 2800-5000rpm — nothing that is going to make it an excitment machine but the drive experience is nothing if not refined and will continue to win fans.

A five-speed automatic is standard fare for the Estate all the way to the C63, which gets the star seven-speed auto.

Estates, or station wagons, are not big sellers in the Australian market but Mercedes believes there is incremental growth available with 300 sales predicted this year and 500 a year after all the engine choices come on line.

There are a range of options unique to the Estate, including self-levelling rear suspension ($2000), dark tinted privacy glass ($1010), automatic opening and closing tailgate ($1010), and a load-securing kit ($700).

Load capacity in the Estate has been increased, at least in volumetric measures, with between 485 and 1500 litres depending on the rear seat position.

That is an improvement of 146 litres over the previous model yet the load is still only rated to carry 100kg.

But before you press the panic button, there are many simple ways to save cash. Take your car. You may not have to rush out and buy the cheapest, smallest and most fuel-frugal car just yet.

Instead, you may be able to find a big car that drinks like a small car.

The choices are hybrid (basically, a small petrol engine with an electric motor for assistance); diesel (expensive fuel, but goes a long way); petrol (no need to expand on this one); and LPG (it's a gas, but it is also rising in price).

Hybrid: A Toyota Prius costs $37,400, about $12,000 more than a similarly sized and equipped Toyota Corolla. But the Prius gets 4.4litres per 100km and expels only 106g of CO2 for each kilometre, while the Corolla gets 7.4 litres per 100km and emits 175g/km CO2. If you drive the Prius 15,000km a year, it will take 18 years to make up its extra price over the Corolla. But you'll feel greener.

Diesel: A diesel automatic Ford Mondeo is almost as big as a Ford Falcon. Yet, the $37,990 Mondeo gets 7.3 litres per 100km compared with the $39,990 Falcon G6 automatic's 10.5 litres per 100km. But diesel is about $1.70 a litre and petrol is $1.50 a litre, so at 15,000km a year, the Mondeo will still save you $700 each year, and about half the number of refuelling stops.

Thinking green? The Mondeo emits 197g/km CO2 and the Falcon is 252g/km CO2.

LPG: Though most motorists don't equate LPG to petrol, unfortunately it suffers the same erratic price movements. It is now in sympathy with petrol and is about 67c a litre. The Federal Government will start taxing LPG from 2011. Though cheaper, LPG is less efficient than petrol and uses up

to 30 per cent more to travel the same distance. LPG conversions get a government rebate, which makes changing over a plausible economy move for long-distance cars. Ford makes dedicated (that is, not dual-fuel) LPG Falcon models that start at $37,890. Canny motorists can buy previous model LPG Falcons at fleet auctions, though you'll be bidding against some serious taxi owners.

An LPG Falcon gets 15.5 litres per 100km compared with a petrol Falcon's 10.5 litres per 100km. The LPG Falcon costs $1400 more, so it takes 20 months for pay-back and then the LPG car promises lower future running costs. Emissions are 233g/km CO2 for the LPG and 252g/km for the petrol Falcon. Note that government rebates are not available for factory-fit LPG vehicles.

Petrol: Basically, if you're not financially blessed to buy a new car, lower your running costs by using the car less. Don't go out and sell the big family car to buy a small-engined car before doing the sums.

A 10-year-old V8 Holden, for example, is a gas-guzzler at about 16 litres per 100km. It's probably worth $10,000 as a trade-in. Buying a smaller Holden Astra, for example, to save fuel will mean you have a newer and safer car for $16,000. At $1.50 a litre, you could have bought 10,670 litres to fuel the V8 for `free' for 67,000km.

 Would you consider buying a hybrid car to beat the oil price rises?

While it may spend its life on racetracks, the tiny Fiat Abarth 500 Assetto Corse will be a wild little thing. It is powered by a four-cylinder turbocharged 1.4-litre engine that puts out 147kW of power and 300Nm of torque. It will have a six-speed gearbox and full racing trim that includes 17-inch ultralight racing wheels, an aerodynamic rear spoiler and racing front grille, complete with twin air-intakes.

Although gaining a full racing roll-cage for safety, the baby Fiat race car will be 180kg lighter than the road car. They will be available in any colour you want, as long as it is pastel grey with red stripes.

Fiat released the first pictures of the new car this week. Fiat Australia spokesman Edward Rowe says the car will be raced in a series of one-marque national championships throughout Europe from next year.

Rowe says the power output of the baby racer is twice that of the Fiat 500 cars used in the celebrity challenge at this year's Australian Grand Prix.

Fiat's involvement in personalising the car and the series extends to the Italian marque providing full racing outfits for each driver.

An appearance Down Under is unlikely as there is not a natural category for it to race in.

Fiat has no plans to introduce a one-make championship in Australia as BMW has done with the Mini Challenge for Mini Cooper racing cars that started this year.

But Rowe says the company has received expressions of interest from drivers in Australia to race versions of the sporty Fiat 500 Abarth road car due here next year. They would most likely contest production car championship events, including the Bathurst 12 Hour race.

Fiat Abarth racing cars were a common sight on European racetracks and rallies in the 1960s. The most successful model was the 850TC.

In Australia, two Fiat 600s (the larger version of the 500) contested the first Armstrong 500 at Phillip Island in 1960, the forerunner of the Bathurst 1000.

Snapshot

Fiat 500 Abarth Assetto Corse

Price: N/A

Engine: 1.4L/4-cylinder turbo 147kW/300Nm

Transmission: 6-speed manual

It will be five years before Nissan Australia is ready for a second shot at the top end of the local car business.

It's working hard on a plan to re-establish the Infiniti brand as it pushes its prestige arm into Europe off the back of success in the US, but admits there is no firm deal.

“I wouldn't say it's definitely happening,” Nissan Australia marketing general manager Ross Booth says.

Infiniti is launching a European attack in 19 countries, including Britain. There's a range of models, from the compact EX to the G coupe and sedan, luxury M sedan and heavyweight QX four-wheel-drive.

“The UK is the first right-hand-drive market, in March 2009. It's a global push now,” Booth says.

But he isn't convinced of the need for Infiniti, or the right timing. The brand came to Australia in 1980 at a time when Japanese makers were moving quickly into extra luxury channels, including Lexus for Toyota, Amati and Eunos for Mazda and Acura for Honda.

The only Infiniti model sold here was the portly Q45, which failed alongside the working-class Nissan models. The brand was withdrawn after less than three years.

But Lexus starred for Toyota, Acura has done well for Honda, and Infiniti is doing a good job in the US with vehicles which are surprisingly good to drive and also good value.

This time around, Booth believes Infiniti can work . . . but only with the right package of products, price and performance.

“We will do it only if I'm sure it will be successful. It has to be done properly. It's a matter of launching at the right time in the right market with the right dealer network. There is no immediate plan,” he says.

Even so, he is taking a keen interest.

“The model is about the customer experience and making sure they are looked after properly. It's not just about whacking up a dealership. We'd have to establish a dealer network that would meet the high demands of customers in that segment.”

Booth also believes Infiniti must have the right products, and not just high-powered petrol engines.

“At this stage for Infiniti, there are no diesel vehicles. In Australia, the requirement is for a diesel variant from launch.”

So, when will Infiniti be coming?

“Not any time soon. Five years sounds like a long time, but that's the sort of time frame you have to be talking about,” Booth says.

With Commodore sales down 24 per cent this year, Holden is examining ways to sustain Elizabeth production and complement its local and export business.

This may mean a small car being built alongside the Commodore and Statesman.

GM group vice-president and Asia-Pacific boss Nick Reilly confirms a rethink is happening.

“We're certainly looking at offering a different portfolio, which we've already started to do,” he says.

Reilly admits that, in the longer term, “one likes to think you're manufacturing to suit the domestic market, and that has clearly changed”.

“In my view, that change is not going to be reversed. In fact, it may even go further than it has already. Longer term, I think we do need to consider what we make here.”

However, he's cautious about what may eventually be built.

“I can tell you, sitting here today, we have no plan to bring in a different model or a different vehicle.”

Reilly says Ford Australia's decision to start building the Focus at Broadmeadows from 2011 makes sense “in the way the market has gone”.

A decision would be made “in two to three years” about which manufacturing direction Elizabeth would take.

“We have to also know what the long-term outlook is for the current products we produce here in our export markets.

“Are they going to stay with those products? Are they going to stay with Holden-sourced products? These are the sorts of decisions made globally in GM.

“We have to see what we're going to be called on for export business, then build into that the rest of our manufacturing plan.”

Reilly says GM-Holden's current export business is strong, and he expects it to remain strong for now, despite the effect on exports of the strong Australian dollar.

GM-Holden exports the Commodore and Statesman/Caprice to the Middle East and the US, where the Pontiac G8-badged Commodore sedan is now on sale.

Despite the high dollar, Reilly says no export program is in doubt, “but if the Aussie dollar goes up another 25 per cent, I can't tell you what we might have to do”.

Reilly says the Elizabeth plant was recognised in GM for its low-cost, low-volume expertise.

“I think one of the most significant things about manufacturing here at a profit is it has as much to do with the supply base as it has with us.

“I think we know how to make 20,000 or 30,000 or 40,000 vehicles and be quite efficient at Elizabeth.

“But you also have to locally source at least 50 or 60 per cent of the vehicle in order to make it locally viable.

“So we do need a supply network that can provide competitive quotes on components.

“We have good relations with suppliers here, but if they're going to bring in new components and new sources of supply, they have to be competitive enough so they can export as well.

“One of the things we're hoping for with the Federal Government automotive industry review is that it's not just a matter of the OEMs, it's very much a matter of the supply base staying competitive.”

India's $3000 Tata Nano will face a surprising new rival from Renault-Nissan.

The European carmaker has just signed a joint-venture agreement with Indian motorcycle maker Bajaj Auto to build a mini-car codenamed the ULC (ultra-low-cost) to compete against the Nano.

The car is expected to cost about $2500 when it goes on sale in India about 2011, and the plan is to export it to other markets. It is also expected to be sold through Renault and Nissan dealers.

However, Renault-Nissan hasn't decided if the car will be sold with Nissan or Renault badges in some Western markets.

Like the Nano, the ULC is aimed at the growing Indian market. It gave clues to the car's possible Euro-look at January's Delhi motor show when it unveiled its Lite concept car.

Company spokesman S. Ravikumar says the Lite show car and ULC would merge into the final production car.

“There is only one car project and the car the joint venture is going to launch is codenamed ULC,” he says. “There are not two cars or two projects.”

Ravikumar says the Bajaj shown at the Delhi show was at the time referred to as the Lite.

“Since then the third-party deal has been struck for the same business idea and all thoughts have now merged into the car codenamed ULC,” he says.

The ULC will be built at a new plant in Chakan in India with initial planned capacity of 400,000 units a year.

The joint-venture company will be 50 per cent-owned by Bajaj, Nissan and Renault holding 25 per cent each.

Bajaj Auto has been selling scooters and motorcycles across India since 1948. Based in the western city of Pune, it is the second-biggest maker of motorcycles in India behind Hero Honda Motors Ltd.

Bajaj Auto executives say the car will initially be available with a petrol engine, but a diesel is planned.

As world fuel prices soar, other mature Western carmakers are looking at a new generation of low-cost, ultra fuel-efficient small cars.

Chrysler has gone into partnership with Chery in China to build a low-cost car. Toyota, Volkswagen and even Hyundai are looking at low-cost cars in India.

The car brand trumpeted as the world's safest will catch up with the pack next month.

Volvo is at last making sure every car it sells in Australia is equipped with ESP and traction control as standard.

It has yet to confirm details of the ESP upgrade, including prices, though all Australian cars coming off the production line this month – which means deliveries in June once they are shipped from Sweden – will have the system.

“We can confirm that dynamic stability control and traction control will be standard on all Volvo models from May production,” says Laurissa Mirabelli of Volvo Cars Australia.

While Volvo is talking up its ESP upgrade, it is also working to finalise details of next year's model line-up after an upgrade last week in Europe. They should be here by October, and the all-new XC60 all-wheel-drive wagon will be the headliner.

The most obvious change, on everything from the baby C30 to the C70, is a larger Volvo badge on the boot. It picks up the prominence of the badge on the XC60 and the latest mid-sized wagons.

The only other change across the range, though not confirmed for Australia, is exterior mirrors that fold flat for parking.

“There will be some minor changes to Volvo's MY09 line-up this year, as there is with its models every year,” Mirabelli says. “The MY09s won't be here until much later this year and we're not in a position to confirm the extent of the changes yet, given we're still going through the business case process.”

She says there are only minor tweaks to the range, apart from the XC60, and nothing big on the technical front. In Europe, there are minor tweaks to nine models and one of the best is an optional system called Homelink. It uses buttons integrated into the sun visor to operate remote-controlled home appliances such as garage doors, house alarms and lighting.

There is an upgrade of the optional satellite navigation on the S40 and V50, a hard load cover is now standard on all C30s and the climate control is upgraded in the C70 with the addition of the Powershift gearbox already fitted to the C30, S40 and V50.

The S80 flagship gets heated washer nozzles and chronograph-style dials in the dash.

A right-hand-drive Mercedes-Benz GLK is moving closer to our shores.

Daimler-Benz executives are in favour of a model for right-hand drive markets, including Australia.

After saying the car would not be built in right-hand-drive, Mercedes-Benz CEO Dieter Zetsche says there is a good chance it will reach our showrooms, but won't say when.

Zetsche confirmed that no right-hand-drive GLK had been planned, but Australia, South Africa and the UK had asked for the car.

“That was the initial situation, but we're working on it and I'm pretty confident we will solve it,” he says.

Other Mercedes executives at this month's Beijing's Auto China Motor Show say a right-hand-drive GLK could arrive when the car is updated in 2010 or '11.

The GLK goes on sale in Europe this year and will have a new performance-oriented twin-turbo 2.1-litre CDI four-cylinder engine among its engine options. The engine is expected to be available in the C-Class here next year.

The GLK CDI is aimed at the Audi Q3 and Q5, BMW X3 and Volkswagen Tiguan. In its most potent state of tune, the twin-turbo Benz engine develops 150kW at 4200 revs and 500Nm from only 1600 revs while consuming 5.4 litres/100km.

Europe will have a 200 CDI, 220 CDI and 250 CDI, in three states of tune.

The 200 CDI model develops 100kW at 3000 revs and 330Nm from 1600 revs and the mid-range 220 CDI develops 125kW at 3200 revs and 400Nm from 1400 revs.

Performance is a strong point.

Mercedes says the car will hit 100km/h in 7.7 seconds in its most powerful state of tune

The electric newcomer, which will sit below the 1 Series, has been confirmed by BMW chairman Norbert Reithofer.

“Later this year, we will decide about building an electric car,” he says.

“Modern lithium-ion batteries would allow for the combination of an electric drivetrain and sheer driving pleasure.”

No further details, but in his annual report he is happy to talk about other additions to the group's line-up – an all-wheel-drive Mini, compact X1 four-wheel-drive and a slightly smaller Rolls-Royce – for next year.

Reithofer also says BMW is taking new directions as it works towards a sustainable future. But he believes plenty, particularly better fuel economy and fewer emissions, can still be achieved with traditional engines.

“Last year we reduced our average fleet fuel consumption more than 9 per cent,” he says. “Our present line-up includes 22 BMW and five Mini models that run below 140g of CO2/km. We will cut fuel use 25 per cent in our new-car fleet between 1995 and the end of this year.”

BMW will produce its first hybrid, based on the latest X6 four-wheel-drive, and is pushing more diesel engines. Ultimately, Reithofer sees a diesel-electric hybrid.

But it's not all good news. Reithofer talks about cutting the BMW workforce by 3100 and cites a range of threats, from rising prices for raw materials to urbanisation.

“Average speed in greater Tokyo is already down to 15km/h. You might as well bike,” he says.

But he believes BMW has a workable long-term strategy.

“Individual mobility will remain a trend,” he says. “And a company that wants to be a frontline player has to consider the world of tomorrow.”

 Would you consider buying a hybrid car to beat the oil price rises?

The first sports car company to build a giant four-wheel-drive has no plans to do it again.

And Lamborghini also rules out joining Porsche and Aston Martin in building a four-door luxury sedan.

The Italian company has closed the door on anything outside its sports car portfolio, and company president Stephane Winkelmann has passed some sharp judgments on the future of the luxury car business.

“SUV's have had their day. They are finished,” he says of luxury four-wheel-drives.

“It's important that we not shy away from our two models, which are helping us to improve awareness of the brand. We want to continue the message of uncompromising and extreme,” is his take on anything four-door that would dilute the Gallardo and Murcielago impact.

Winkelmann says there is no chance Lamborghini will return to making a large off-road vehicle because it would be lambasted by environmentalists.

Lamborghini produced the LM002 off-roader with a 5.2-litre V12 engine from 1986-1992 at a time when the company was part of the Chrysler empire.

“We were the first to come out with an SUV, and people forget we were the first to come out with a real two-plus-two (the Lamborghini 400GT),” Winkelmann says.

“To say ‘let's do an SUV' is not possible. There is no such thing as luxury SUVs. They are premium cars. I believe if we do an SUV it would have to be the biggest and strongest, but by its nature it would be very polluting and we would be crucified if we did it.”

It would also complicate Lamborghini's plans to reduce emissions by as much as 40 per cent.

So Winkelmann says Lamborghini will stick with today's two-model line-up, though there will be some undisclosed derivatives.

He has plenty of reasons to be happy. Lamborghini has raised pre-tax profits from $567 million in 2006 to $765 million last year, mainly through better efficiency and drawing on partnerships – mostly in the VW Group, which owns Lamborghini – for such things as parts purchasing and back-room development.

Lamborghini is on the move worldwide and, in Australia, its success is reflected in a new Brisbane dealership. Another will open in Perth before the end of the year.

They are among 10 new dealerships worldwide that will boost Lamborghini's global network to 107, a number that has already risen from 65 in 2005.

“Sydney and Melbourne make up 60 to 70 per cent of the market, but Queensland and Western Australia are both growing,” Winkelmann says.

“We are not quite at 100 cars yet in Australia, but we are getting there. Australia is one market in the Asia-Pacific region that is growing.”

Lamborghini sold 46 cars in Australia last year (up from 38 in 2006) compared with Ferrari, which sold 145 (up from 101 in 2006).