Australia no longer has a new car priced below $20,000 drive-away

Anyone looking to buy a new car for a teenage member of the family – or drive a cheap reliable hatchback into retirement  – will now need to pay more than $20,000 drive-away for the first time in at least four decades.

Australia no longer has a new car priced below $20,000 drive away after Chinese brand MG vacated the budget segment with the arrival of the new MG3 hatch (pictured above) which starts from $23,990 plus on road costs – or about $26,000 drive-away.

Japanese brands Toyota, Mazda, Nissan and Suzuki had already vacated the sub-$20,000 drive-away segment last year. 

The cheapest new car now sold in Australia is the Kia Picanto (pictured above), which has started from below the $20,000 drive-away threshold for most of is time in Australian showrooms.

The battle between these two models is indicative of the looming battle between car makers from China and Korea. 

Chinese brands such as MG, GWM Haval, Chery and LDV now dominate the $20,000 to $40,000 price bracket in Australia as Japanese and Korean brands scurry to higher ground, with limited options to compete in the budget end of the new-car market. 

The previous generation MG3 was previously priced from $15,990 plus on road costs, which still snuck under $20,000 drive away. 

The cheapest variant in the new MG3 line-up starts from $23,990 plus on road costs, or about $26,000 drive-away. 

The Kia Picanto was previously priced from $14,390 plus on-road costs, or about $16,990 drive-away.

But the recently updated Kia Picanto now eclipses the $20,000 drive-away barrier even though the RRP is $17,890 plus on-road costs (about $20,690 drive-away). 

Here’s a quick recap of two of the cheapest new cars in Australia in showrooms today:

Kia Picanto prices:

• Kia Picanto S manual: RRP $17,890 ($20,690 drive-away)
• Kia Picanto S auto: RRP $19,490 ($21,690 drive-away)
• Kia Picanto GT-Line manual: RRP $19,690 ($22,490 drive-away)
• Kia Picanto GT-Line auto: RRP $21,290 ($23,490 drive-away)

MG3 prices:

• MG3 Excite auto: RRP $23,990 (about $26,000 drive-away)
• MG3 Essence auto: RRP $25,990 (about $28,000 drive-away)
• MG3 Excite Hybrid auto: RRP $27,990 (about $30,000 drive-away)
• MG3 Essence Hybrid auto: RRP $29,990 (about $32,000 drive-away)