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Small cars are failing to drive big sales

Kia expects to sell about 300 of its small Picanto hatchback a month.

Micro cars may be on the nose in Australia but no one seems to have told the makers.

Sales of tiny city cars with modest engine outputs dropped by more than a third last year but that hasn't stemmed the flow of new models.

Hot on the heels of a new Holden Spark and Fiat 500 comes an update for the best-seller in the segment, the Mitsubishi Mirage.

The Mirage arrives in time to take on Kia's first entrant into the segment, the tiny European styled Picanto, which lands next month.

The tiddler of the Mitsubishi range has a new front grille, redesigned bonnet and different wheels to go with a cabin that claims better quality seat materials and piano black accents to lift the ambience.

There are two new exterior colours — wine red and sunrise orange — but the biggest changes are under the skin.

New electric power-assisted steering is said to have improved response while also making the Mirage easier to manoeuvre and more comfortable on the highway.

Mitsubishi has recalibrated the car's continuously variable transmission for better in-gear acceleration and tweaked the suspension to reduce body roll through corners, improve ride comfort and reduce road noise.

There are no price cuts but the brand, which already has a higher than normal five-year warranty, has reduced the cost of capped servicing by $270 over the four-year period.

Car brands got excited about the micro-car market a couple of years ago, when rising fuel prices and greater emphasis on emissions suggested car buyers would rush to downsize.

That failed to eventuate, as our love of SUVs put paid to a small-car revival.

Last year, Volkswagen pulled the pin on its tiny Up (which tallied just 321 sales the previous year) and while the Smart ForTwo was also yanked from the local market.

The only new entrant last year, the budget Suzuki Celerio, made a modest debut, selling just 1400 cars despite the lowest price tag for a new car.

Sales of the Mirage, the top seller in the segment, dropped by 40 per cent.

Despite the doom and gloom Kia is pressing ahead with plans for an April launch of the Picanto.

Kia spokesman Kevin Hepworth told CarsGuide last year the brand expected to sell about 300 Picantos a month.