Carbon-fiber is seen by many in the auto industry as one of the most effective ways of reducing vehicle weight and improving fuel economy and emissions levels, but the relative expense of the material means that it’s still reserved for only a handful of high-end production cars. BMW has effectively used carbon-fiber roofs for its M cars to help lower their center of gravity, and Nissan and General Motors have used the composite material to help save weight for the GT-R and ZR1 supercars.

For most carmakers, mainstream carbon-fiber use is still several years away but a number of Japanese firms, including carbon-specialists Toray Industries and Mitsubishi Rayon, are reportedly working closely with Nissan and Honda to develop a new, low-cost carbon-fiber material for use in mass-produced cars.

The Japanese government will provide close to $20 million over the next five years for the project, and the University of Tokyo is also taking part. The final goal is to be able to mass produce the material by the mid-2010s and to make vehicles 40% lighter than current models. Such a saving in weight could potential reduce fuel-consumption and emissions by more than 30%.

Speaking with the Nikkei, a spokeswoman for Japan’s New Energy and Industrial Technology Development Organization (NEDO) said the government was also researching the further use of aluminum and other light weight metals to replace much of the steel used on vehicles. Also under investigation is technology to recycle carbon-fiber and help reduce production costs.

Both Honda and Nissan confirmed they were exploring various new materials to use on vehicles but denied there were involved in the government funded project to produce cheap carbon-fiber.