Market Insight: Small segment sales sinking

Growing numbers of buyers are moving into higher-riding SUV alternatives and the market has responded with a dwindling choice of small passenger cars – matched, of course, by the number of sales recorded. 

Last decade, small passenger cars accounted for one in every five new vehicles sold. Now, that ratio is three in every 50. 

VFACTS figures from December 2015 show 223,122 new small passenger cars were delivered, accounting for a market share high of 20.1 per cent. 

By comparison, today’s figures show just 30,264 small passenger car sales to the end of May, translating to 6.2 per cent of the new car market overall. 

Extrapolating these figures, it is forecast just 72,633 new small passenger cars will be registered in 2025, or 6.1 per cent of the overall market. 

While changing buyer values have shifted the focus away from small passenger cars in the years since 2015, so too has an increase in price. 

Popular nameplates of the past decade were almost religiously priced from $19,990 in entry form, rising to no more than $40,000 for a top-of-the-line model. 

Compare those numbers with today and a bracket creep effect has taken place, resulting in the number of small passenger cars in the premium (over $45,000) segment than in the mainstream equivalent (by a ratio of 9:16). 

It is a far cry from the 2015 split where that number was 32:14 in favour of less-expensive models. 

The shift in pricing is exemplified by models including the Honda Civic and Volkswagen Golf which now reside in the Over $45K side of the segment, with starting prices of $49,000 drive-away and $38,690 plus on-road costs respectively. 

The data also shows the contraction in segment population from within the small passenger car segment. 

In 2015, there were 46 small car models available either side of the mainstream-premium divider, including now-defunct favourites like the Ford Focus, Holden Cruze, Mitsubishi Lancer, and Nissan Pulsar. 

Today, there are just 25 new small car models available nationally, the Hyundai i30, Mazda 3, Subaru Impreza, and Toyota Corolla the only nameplates familiar to the lower side of the segment divide of a decade ago. 

As we move toward the second half of 2025, a trend toward particular makes and models on either side of the small passenger car segment price divide is emerging – but with almost all down on last year’s sales. 

In the sub-$45K part of the segment, leadership is held by the Toyota Corolla with 7907 YTD sales, or 27.8 per cent fewer than the same time last year. 

The Mazda 3 places second with 4535 sales (up 1.0 per cent) ahead of the Hyundai i30 with 4323 sales (down 24.2 per cent), newly introduced Kia K4 (replacing the Cerato) with 1892 sales, and MG 5 with 1266 sales (down 33.2 per cent). 

Moving to the above $45K side of the segment, the battery electric MG 4 tops the ladder with YTD sales of 2017 units, or 15.1 per cent less than in May 2024. 

The VW Golf places second with sales of 1353 units (up 63.8 per cent) ahead of the Subaru WRX with 887 sales (down 3.3 per cent), BMW 1 Series with 781 sales (up 81.6 per cent), and Mercedes-Benz A-Class with 712 sales (down 22.8 per cent). 

10-year small passenger car segment shift*: 

*All sales data supplied courtesy of VFACTS. 

^Forecast figures based upon YTD sales.