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Best budget new city hatchbacks

The Kia Picanto is due in showrooms next week starting at $14,990 drive-away.

Buyers on a budget will soon be spoiled for choice.

Less than a month after Holden gave its small-car line-up a big boost with the new generation Spark, starting at $14,990 drive-away, another sharply priced hatchback is around the corner.

The Kia Picanto due in showrooms next week with a single model — also starting at $14,990 drive-away — comes standard with an automatic transmission.

On the Spark, auto adds $1700 (to $16,690 drive-away).

The Kia has other aces up its sleeve: a seven-year warranty compared with three years' coverage for the Holden, and a more frugal engine that makes it cheaper to run.

Meanwhile Hyundai is responding to the new tiny-tot challengers with its larger Accent hatchback.

Now that the Hyundai i20 has been discontinued, the maker has slashed a whopping $4500 off the price of the Accent, which has limboed to $14,990 drive-away ($15,990 drive-away with automatic).

Adding pressure to the just-released Spark, the Accent still comes with factory-backed five-year/unlimited kilometre warranty coverage and capped-price servicing — even though it is the cheapest model in the range.

"Drive-away" pricing which works most effectively in the budget end of the new-car market, where every dollar counts.

Sales of "city cars" have dropped by one-third so far this year but the recent arrivals as well as heavy discounting by established players are expected to provide a much needed jump start to the segment.

A refreshed Mitsubishi Mirage is also on the way. The manual transmission version can be had for $13,990 drive-away but the price for an automatic has risen to $15,990 drive-away.

Car makers like to advertise the price of manual models because it gives them a cheaper starting point, even though automatics account for the overwhelming majority of sales in the segment.

Nissan, having teased buyers with "free on roads" or low interest rate finance offers, has finally revived transparent "drive-away" pricing which works most effectively in the budget end of the new-car market, where every dollar counts.

The Nissan Micra ST automatic is $14,790 drive-away and the manual $12,990 drive-away.

This is the cheapest the updated Micra Series II has been since it was released in April last year.

To date, however, no one has managed to limbo to the super-sharp price of the Suzuki Celerio, which has been $11,990 drive-away for a manual ($12,990 drive-away for automatic) since it was launched in February 2015.

Even though they are the cheapest cars on sale in Australia, all come with at least six airbags and a four-star safety rating.

What do you think is the best budget new small car? Let us know in the comments below.