Proton now our cheapest car

The price fight is being sparked by Proton, which has taken the lead from Suzuki as both brands - and a bunch of others - brace for the first Chinese passenger car imports later this year.

Suzuki dived first into the sub-$12,000 range with an $11,790 showroom sticker for its baby Alto, as well as a drive-away deal that runs through January at $12,490. On-road costs are generally set around $1500.

But Proton is now ready to go with a $10,990 price fighter.  It is a 1.3-litre version of its S16 sedan and, even though it will only have a single airbag for the driver, the Malaysian make is expecting a solid response.

"We'll have the car in showrooms on June 1. We're finalising the plan at the moment," says John Startari, managing director of Proton Cars Australia.  We're still working on the specification and assessing the market situation. We need to determine which strategy we use going forward."

But he confirms the $10,990 starting price - before on-road costs - and says it is a follow-up to the current 1.6-litre S16 at $11,990.  "The S16 is already a winner. We only got the car into showrooms in December and, of the 334 cars we sold last month, 228 were S16s. It's certainly had the impact we were after."

Proton has taken over from Korean cars - Hyundai led the way - as Australia's price fighter and Startari makes no excuses for trying to drive the brand forward. Proton came to Australia in 1995 and, despite some successes with a GTi and its Jumbuck ute, has never made a real breakthrough onto shopping lists.

"The price thing is more about establishing the brand. It's about time we established Proton as a contender and built the sort of carpark we need to allow us to expand," Startari says.  "We need a minimum of 25,000 cars in the carpark and at the moment we're around 15,000. We have a five-year plan in place to grow that.

"We'll be very aggressive in the initial stages. So there has never been a better time to buy a Proton."