well pipo's idea of a volvo turbo engine is great as well !!
they are powerfull , easy too tune and can be found in older cheap volvo's

so the list so far is either bmw or volvo

forget the mx5 comment ^^ that engine is way to underpowered to get any
power from it without breaking the bank

what i mean is too tune that engine would cost a lot of money , with that i mean get a good number of horsepower in a bullet proof way

best is too start out with a engine thats got good power stock and is known to be tune-a-ble

and he said it has to be cheap so thats important too think about > good hp and low price and still reliable

but also dont forget the 2jz engines from toyota / lexus !!
the twin turbo engine from the supra is known by most people , they are also found in the toyota aristo (same as lexus gs300)

lexus gs 300 = non turbo
toyota aristo = twin turbo (factory)

same as the supra witch also came in turbo and non turbo

now that non turbo engine packs a lot of horsepower and can be found sooo cheap by buying an old lexus gs300 witch people cant sell easy and tehrefore are cheap

and what do you think about running a 8 cilinder !!! buy an older style lexus ls !!!!
bit heavy and big (engine) but if you could simplify the engine it could be awsome.. (got to love a v8)

and those engines and parts around it are very very reliable

i do think they are harder to take apart and harder to get the electrics open inside (dash etc) just because all the screws are hidden and the build quality is super high on a lexus

i owned a gs300 and basicly the car never squeeked , inside was soo quiet on the freeway ..

bare in mind if you look around old lexus cars can be found for a steal ... people dont buy them due to high fuel consumption (big heavy cars with bigger engines)
but for a fun kitcar the fuel consumption isnt the most important and weighing maybe half waht a lexus weighs it would run cheaper if driven slower ..bla bla bla

Remember he's building a fun/track day car, not a time attack monster. If he uses the MX5 as donor he'll keep both the cost and the weight low.

Just about everything else I've seen suggested here would break his bank.

Recent model MX5 has the 2.0 MZR, which is essentially relabeled as the Ford Duratec engine. If you change the induction kit (~€2000) you are keeping the engine reliable as hell but will still push it from standard (168hp) to over 200hp easily. Keeping the curb weight low, lets say 1000kg, 200hp/tonne with an LSD is a lot of fun. You can get it to about 240hp but above that the cost effectiveness drops a lot. As far as engines go this is pretty much plug and play.

You can actually get a pre-built MZR engine that's more oriented towards motorsport with different throttle bodies/carbs which is more popular with Caterham/Kit car builds. If you want solid advice I'd suggest contacting these guys http://www.sbdev.co.uk/SBD%20Motorsport%20Display.htm . Their site also provides a lot of information from the get go.

If you wanted to go full blast you could go with something like a Cosworth YB engine. The production unit is 2.0 liters but through various forms of tuning people have gotten well over 800hp out of it. But this is only a viable option (as with the other suggestions in this thread) if you have a lot of money and all the weekend hours spent taking care of it.

I stand by my original advice. (yes that includes you guys being noobs :p)

Can you find cheap crashed or rusty MX5's in Hungary?

if an mx-5 is an option, maybe think about an toyota mr-2 too
They were available with a turbo engine too!!

The Hungary is just an illusion
I am hungarian but live in Germany so the market is slightly bigger...but yh i have been able to find a couple MX-5s here in germany between 1000-2500euros...but I am still haven't given up!

first of all construct is talking about the newer model witch got more power indeed , and construct talkig about the recent 2.0 isnt very low budget

i'll bet the ones he found in germany have the 1.6 l engine (first models) (??)

but seriously i can think of so much great engines and drivetrains , but everything you named construct isnt low budget by far
i think you need to think more in the direction of a shed build car , looowwww budget , because thats the idea i got from his story
same as me building a chopper with second hand parts all costing little to nothing

i was still in the low cost so my previous comment was vbased on the original mx-5 with the 1.6 , imo not suitable for a kitcar

Many of these cars (locost, Super7 etc.) are often build with Sierra components for a reason. And with an adapter it's possible to run newer Zetec and Duratec engines on the Sierra gearbox too.Try finding a late Scorpio 2.3 with the bulletproof 16v 147hp engine