Buyers winners in small-car price war

The price battleground is buoyed by the strong Australian dollar, low interest rates and "the most competitive market in the free world".

The new version of the world’s best-selling car, the Toyota Corolla, has wound back the clock to the same price it was 11 years ago. It goes on sale today starting from $19,990 plus on-road costs (not to be confused with the runout model which has been advertised for $18,990 drive-away in some states).

Other big brands have joined the fray. Ford dropped the price of its Focus hatch last month, and Nissan has announced a $19,990 starting point for its Pulsar three months before it goes on sale.

Meanwhile, the top-selling Mazda3 is currently on offer for $20,990 drive-away – a saving of about $3000. The heavy discounting will put further pressure on the Holden Cruze, the only locally-made small car. “It’s a ballistic segment,” says the boss of Nissan Australia, William Peffer. “There are some 500-pound gorillas doing really well in that segment -- Toyota, Mazda, Hyundai -- so it’s going to take our A-game to get in there and do well.

“I think the ultimate winner here is the customer.” Peffer has just arrived at Nissan Australia from his previous position in North America and says Australia is the most competitive car market in the world. “There is no place that I’m aware of in the free world that has the number of brands per 1 million sales as Australia. There are low [import] barriers to entry, anyone can compete.”

The executive director of sales and marketing at Toyota Australia, Matthew Callachor, says prices are down because cars are cheaper to build than ever before. “It is cheaper for us to build new cars versus old ones,” Callachor says. “You get new materials, new production methodologies and other cost efficiencies.

“The competition in this market has been tough for a while … so you’ve got to stand out. “In my memory it’s the toughest market. It’s as good an offering as [customers] are ever going to get.”

DRIVE A BARGAIN

Toyota Corolla: From $19,990 plus on-road costs (the last time a Corolla was $19,990 was in 2001).

Nissan Pulsar: From $19,990 plus on-road costs (the last time a Pulsar was $19,990 plus on-road costs was in 2006).

Ford Focus: From $19,990 drive-away (was $21,990 plus on-road costs – approx $4000 saving).

Mazda3: From $20,990 drive-away (was $20,330 plus on-road costs – approx $3000 saving).

MOST CAR PRICES ARE “PLUS ON-ROAD COSTS”, TYPICALLY $3000 OR SO FOR DEALER DELIVERY AND REGO ETC. “DRIVE-AWAY’ PRICES ARE USED IN ADVERTISING AND ARE TYPICALLY SPECIAL OFFERS.