This paper presents a new design of a low-cost mechanicalhybrid powertrain with large fuel savings. The hybrid powertrain contains only low-cost mechanical components, such as a compact flywheel module and a Continuously Variable Transmission (CVT). No electrical motor/generator or battery is used. On the basis of the characteristics of typical driving cycles, the energy storage capacity of the flywheel module is derived accordingly. The fuel-saving potential of the new powertrain is simulated for a compact passenger vehicle, which represents the aimed vehicle segment in emerging markets. Simulations show that the fuel-saving potential, with respect to the same vehicle without flywheel module, ranges in between 15% and 29%, depending on the considered driving cycle.