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These are the most affordable new hatchbacks in Australia.

BYD has detailed its upcoming Racco city car as it gears up for debut in Japan.Designed expressly to meet Japanese Kei car regulations, the Racco represents BYD’s greatest market-specific attempt to shake the hold of local automakers, and serves a symbolic threat to Japan’s dominant carmakers on their own turf.The boxy battery electric is confirmed to be front-wheel drive only with two battery capacities (20kWh or 30kWh) allowing for either 200km or 300km of driving range, respectively.The brand has now revealed the car’s interior, which it did not show at its reveal at the Japan Mobility Show last year, and has confirmed it is targeting a mid-2026 launch date for the diminutive city car.On the exterior, the Racco sticks to BYD’s ‘Ocean’ design theme, while blending in the space-efficient boxy profile usually only worn by domestically-built Japanese Kei cars like the Mitsubishi eKX, Suzuki Spacia or Daihatsu Tanto.Meanwhile the interior features many familiar themes from other BYD models, including a digital instrument cluster and  central multimedia touchscreen perched atop the dash, a central control panel housing various buttons and dials. Interestingly, it features a shift stick rather than the dial-based toggle selector as seen on the Australian-delivered Atto 1, or the stalk-mounted shifter as seen on many newer BYD models.The brand says this central control console was deliberately designed to be familiar to the cabin ergonomics of other Kei-class vehicles to suit the tastes of Japanese buyers.The interior images also confirm at least one grade of the Racco will feature heated front seats, and split-bench style seating as is common on Japanese city cars.It will also feature dual sliding doors like other Kei-class vehicles, and is designed to fit a bicycle in the boot.As part of a new pre-launch web portal for the Racco in the lead-up to its Japanese launch, BYD says it assembled a specialized research team in-house to travel Japan and study how buyers used Kei-class vehicles.BYD is targeting a starting price of around the equivalent of $23,000 for the Racco.Elsewhere BYD’s range in Japan mirrors that of the models available in the Australian market, likely due to its fellow right-hand drive configuration. The brand markets the Atto 3, Dolphin, Seal and Sealion 7, although is yet to offer some of the newer vehicles in our market, like the Atto 1, Atto 2, Sealion 6, or Sealion 5.It is interesting that BYD is focusing on EVs for the Japanese market, rather than plug-in hybrids, as it aims to carve out a niche in a country where Chinese cars are yet to be accepted.The brand’s commercial division also intends to launch a Japan-specific T35 compact cab chassis vehicle for the Japanese audience.Other Chinese brands are also eyeing a Japanese debut, including Geely and Xiaomi.As for the Australian market, BYD’s executives have previously indicated to CarsGuide we’re unlikely to see the Racco, as the model is made specifically for the Japanese audience. It is likely instead the Atto 1 will play this role in the compact hatch segment alongside the likes of the Kia Picanto, Fiat 500, Hyundai Inster, and incoming Honda N-One based Super-One.

The already angry looking Toyota GR Yaris GTS race car for the road has been given an Aero Performance package that not only makes it more dynamic but it now looks downright furious.

Chery is going to shake up stale and uninteresting competitors in Australia.Chery Australia Chief Operating Officer Lucas Harris has revealed some of the cars on his wish list for Down Under, and the fast-rising Chinese brand has some of the biggest names in the business in its sights.“I think having a very small and then a small hatchback would be a game changer,” said Harris.“I think there’s a huge amount of potential in those segments, and at the moment I think those segments are a little bit stale and not that interesting.“So if we could bring something like the QQ, I think it’d be a huge amount of opportunity,” he said.That opens the door to two new cheap small cars from Chery’s city-focused QQ range.The very small hatch could refer to the QQ Domi, which was revealed last year.It is a pint-sized electric hatchback measuring just 3.7m long and 1.7m wide, which is just bigger than a Kia Picanto but smaller than a Suzuki Swift.It’s nearest EV competitor would be the larger BYD Atto 1, which is called Seagull in other markets.In China it launched at the equivalent of about $13,000. Chinese cars are usually 20 per cent more expensive here than the home market, which would mean it could lob in at about $16,000. That would make it not only Australia’s cheapest electric car, but the cheapest car overall.It has modest numbers to match its low price tag, with a single electric motor making 40kW and 110Nm sent to the front wheels. A little 28.5kWh lithium iron phosphate (LFP) battery, which is about the same size as found in plug-in hybrids, delivers a claimed driving range of up to 305km, according to the very generous China Light-duty Test Cycle (CLTC).Next up would likely be the bigger QQ3, which just opened for preorders in China.It measures 4195mm long ,1811mm wide and 1573mm tall, which puts it in the same ballpark as the Geely EX2 and slightly smaller than the BYD Dolphin.Power comes from a single rear-mounted electric motor making either 58kW or 90kW, which drives the rear wheels.At its core is a LFP battery that provides a driving range between 280km and 401km, depending on the grade. That is calculated via the lenient CLTC testing regime, so expect much less in the real world.It would likely be priced sub-$30,000 if it arrives Down Under.Chery also has one of the biggest names in the business in its flights, with the Toyota Camry officially put on notice.“And we also have some really great medium and large sedans in other markets — left-hand drive — which I think that sort of size in between medium and large sedans is a real opportunity in Australia as well,” said Harris.“There’s only really one serious competitor, and they don’t have much competition. They kind of own the whole market. So I think there is certainly a lot of opportunity there as well.”Chery will need to play in a lot more segments over the next few years if it wants to crack the top 10 and future top five sellers list in Australia.

Hyundai hasn’t even revealed the small Ioniq 3 yet, but the South Korean carmaker appears to be working on something even tinier.As reported by Chinese publication Autohome via Indian forum site Team-BHP.com, a camouflaged prototype of what is tentatively being called the Hyundai Ioniq 1 has been spied in India.It has a boxy SUV silhouette, a split headlight set-up with Hyundai’s ‘Parametic Pixel’ daytime running light (DRL) motif and an illuminated brand logo, flush door handles, plus a virtually non-existent rear overhang.It appears this forthcoming vehicle will be less than 4.0 metres long and could be aimed at developing markets, like India. Vehicles under 4.0 metres long receive tax breaks in India as they have a smaller footprint and are generally more fuel efficient than larger cars.Autohome speculates production of the Ioniq 1 could be based in India, though it’s unclear whether export markets are on the cards.No details on the electric powertrain or the platform have been detailed yet.Once the Hyundai Ioniq 1 does go on sale it will go up against the likes of the Mahindra XUV3XO EV, plus the Tata Nexon EV and speculated Suzuki Fronx EV in India.It’ll also likely form as an electric counterpart to the Venue small SUV which was recently launched in new-generation guise in India.Autohome speculates the Ioniq 1 could also be offered in markets outside of India. If this is the case, Europe would be a likely candidate as a number of tiny, entry-level electric vehicles (EVs) are popping up from many carmakers.However if the Ioniq 1 is exported to other markets, like Australia, it would likely be more of a budget alternative to the Korean-made Inster. It would also go up against the likes of the BYD Atto 2, GWM Ora 5 and the Leapmotor B10.It’s expected the reveal of the Ioniq 1 will follow after the Ioniq 3, which is being unveiled in April.As previously reported, the Ioniq 3, as previewed by the 2025 Concept Three, will likely adopt a fastback-style hatchback look. It’ll likely almost be a new and electric take on the Veloster hatchback.It’s likely to be built on a version of the Hyundai E-GMP platform like the larger Ioniq 5, Ioniq 6 and Ioniq 9.

Have you ever felt like things are spiralling out of control lately? That horrible feeling that you know something is wrong and people are standing idly by and allowing it to happen regardless?I have increasingly felt that way about new car safety, so much so I feel the time has come to draw a line in the sand.Let me be clear from the beginning — safety should be everyone’s top priority in the car industry. Whether it’s engineers, designers, salespeople and even us motoring writers - we should all be doing our best to ensure that you (the new car buyer) get the safest car possible.However, in recent years I have started to feel that new car safety has not only stopped improving consistently, but has actually begun to regress. Why? The over-reliance on advanced driver assistance systems (ADAS) and the seemingly inconsistent way it is applied to new vehicles and equally inconsistent ways cars with poor technology are applauded by third parties and hailed as superior.I am fortunate enough to drive dozens of new cars every year and increasingly the difference between good active safety systems and bad ones are becoming more and more apparent, frankly annoying and distracting.The systems I’m talking about are ones like ‘driver attention monitoring’, ‘speed limit recognition’, ‘active lane keeping assistance’ and similar. Good versions of these systems keep you alert, informed and safe. Bad versions of these systems are distracting to the point of dangerous.That’s because, unfortunately, for many brands adding these active safety systems became a box ticking exercise, simply having them was enough as they weren’t tested in the real world by safety authorities, even though brands were punished for not having them.As Peter Matkin, Chery’s Director of International Engineering for International Programs, told me last year, many of these systems are developed by third-party suppliers who are simply working to a theoretical range and aren’t practically applying it to real-world situations.“When we started with all of the ADAS work, we were effectively just meeting legislation,” Matkins conceded. “We told the suppliers, this is the legal requirement, we need to meet this. So from a supplier perspective, he doesn't care whether the car bounces between the lanes. He doesn't care. When I drive the car, I say, ‘this is shit, we're not selling this.’ So, you know, we now give a lot more targets now, to the supplier.”That’s a refreshingly honest answer from a car company engineer and it’s good to know that people like Matkin are working to ensure that systems actually work for customers on the road and not just on a piece of paper.Recently I drove a new vehicle that beeped incessantly, any time the speed limit changed or if I didn’t slow down fast enough, or even if I just looked away. Literally, on several occasions it beeped to warn me that I was ‘mildly distracted’ at which point I looked down to see what the beeping was about (in case it was something dangerous) only for the system to then beep again and tell me I was ‘moderately distracted’ — by the car’s own beeps! The end result of poorly calibrated ADAS is drivers will find a way to turn it off, which unfortunately tends to be required every time you start the car - which is a deliberate requirement from legislators that typically travel in the back seats, rather than the driver’s seat…What’s the difference between a car that doesn’t have active lane keeping and one that does, but has such a bad system the driver turns it off every time they start the car? Both cars operate the majority of the time without the system, so a sub-standard system is effectively useless. ANCAP, to its credit, has updated its testing protocols for 2026 to try and address some of these issues. Its testing will now try and provide a more detailed analysis of how the various active safety systems work and encourage more seamless operation.Because, make no mistake, properly calibrated ADAS can work and when it does it’s brilliant. Some brands are clearly spending more time on these systems than others, and the net result is a safer experience for the driver without any of the irritating distraction of endless beeps and warnings.Unfortunately, the recent rush to ensure all these systems were installed regardless of functionality means there will be a generation of dangerous distracting cars on our roads for the foreseeable future.

The premium small car category (starting under $80K) is an interesting one because there are many cars that might not necessarily be cross-shopped, but in one way or another they end up being compared to one another.Our 2026 CarsGuide Car of the Year awards category shortlist saw entrants from Audi, BMW, Cupra, Renault, Smart, Subaru and Volvo. The vehicles range from small petrol hatches all the way to small electric SUVs.Now we’re at the pointy end and it’s time to whittle it down to a winner. First up are the two runners up in alphabetical order, then the category winner.This small SUV from Audi is an oldie but a goodie and that’s how it has ended up as a runner up for CarsGuide’s best small premium car.CarsGuide reviewers love how the Q3, despite its age, still presents well with a stunning exterior design, while the driving experience is elegant, yet fun.“I think it’s such a neatly executed package, it’s hard to pick faults in that car,” said CarsGuide Deputy Editor James Cleary.However there is a new-generation model set to launch locally in early 2026 that could potentially become the new benchmark for the segment.While this French small electric SUV hasn’t stormed up the sales charts like some of its competitors, it’s a dark horse with charming driving dynamics and a stunning interior design.CarsGuide Deputy News Editor Tom White, who had one for a three-month long-term loan early in 2025, noted it’s a car that moves the Renault brand forward in Australia.In fact, he said that everyone who sat in this tester asked if it was a Kia, which he believes is a massive compliment to the Megane E-Tech.The few things holding this car back are the mediocre AC charging rate, plus the Australian-specification car does miss out on things like connected services, which are offered overseas. Thankfully Renault has committed to addressing the latter with an update in 2026.Although it’s been a couple of years now since the current-generation X1 launched in Australia, it still stands out as a segment benchmark, therefore making it a clear choice for CarsGuide’s best premium small car of 2026.“Previously the Q3 was my favourite in that category, I think the X1 does move the game forward,” said CarsGuide Deputy News Editor Tom White.It not only offers class-leading petrol-powered variants, but the availability of electric powertrains in the same body style. All of them have stellar driving dynamics and high-tech interiors.Additionally, besides its compact exterior dimensions, the X1’s clever interior packaging and available storage space makes it almost feel like a mid-sized SUV. You can see why this is now the best-selling BMW in Australia.

There can be only one winner in the CarsGuide Car of the Year – Best Small Car Starting Under $50K category.But luckily for a couple of models there’s also room for two runners-up on the podium.The category’s shortlist featured some strong competition, with the two runner-up models the result of some debate in the COTY War Room over a few front-runners.But unlike the other categories in the 2026 CarsGuide Car of the Year awards, the winner in this category was unanimous.Read on to find out which model impressed each judge more than the other nine entrants.Make no mistake, the MG S5 EV falling short of the category crown shouldn’t be seen as disappointing.MG’s cars have been handed mixed reviews by CarsGuide journalists since the brand relaunched in Australia a decade ago, and even recently some models have arguably leant on the low price as a selling point.But the MG S5 EV is changing opinions. A significant jump in quality, ergonomics and driving ability put the small electric SUV close to the front of the pack in terms of buying propositions – plus it’s a $40,490 drive-away ask.“The MG S5 EV gives everything such a run on the value front. It changed my mind about MG’s EVs in that segment,” said CarsGuide Deputy News Editor Tom White in the COTY War Room discussion.Our Deputy Editor James Cleary summed the S5 EV’s strengths up with an economical number of words: “Looks, dynamics, practicality, space, reasonable range and its warranty.” But while the S5 received near-universal praise in the War Room discussion, Senior Journalist Laura Berry mentioned its price as being a strong reason to consider the S5 EV, even if the winner in this category has it covered in all other areas. “Being $7000 less than the winner, it’s a really compelling argument. It’s fantastic value and a great car,” she said.Could the Qashqai be Nissan’s best current offering in terms of broad appeal? After a new generation was quickly followed by a design refresh, the small SUV now looks stunning, and its interior has been updated to feel properly modern. When judging took place at the end of last year, the $34,665 starting point for its entry petrol ST grade was the cheapest way into the model, though Nissan has since announced that the Qashqai is hybrid-only going forwards.But soon the e-Power hybrid will start from $45,640 before on-roads, but its quality and smooth on-road performance still impressed judges in the pricier e-Power hybrids.“Qashqai as a range has some of the widest appeal and most versatility,” said Deputy News Editor Tom White. “It won the comparo it was in for us, too.”That comparison was with the Qashqai ST-L, the Kia Seltos Sport+ 2.0 and the Subaru Crosstrek R back in 2023, and that was before the facelifted Qashqai arrived.While judges also praised its e-Power hybrid variants for their driving feel (“that e-Power system is amazing,” said Senior Journalist Laura Berry), there was another huge win when it comes to considering the Qashqai.Contributing Journalist Byron Mathioudakis pointed out that it “also has a very useful 10-year warranty”.The EV3’s place atop the podium isn’t a massive surprise to me, but to have each of the other judges call it their pick of the bunch was heartening.I’ve spent the most time in the EV3 compared to the rest of the panel, after its international launch in Seoul, its Australian launch through the Gold Coast hinterland and some more time living with the small electric SUV.CarsGuide Managing Editor Tim Nicholson praised the EV3’s combination of clever packaging and fun from behind the wheel. "There is not much the Kia EV3 gets wrong. It has an edgy, modern design and a visually appealing and surprisingly spacious interior,” he said. “And you also get punchy EV performance and excellent ride and handling. It's an exceptional overall package." A lot of thought has clearly gone into the EV3, and while it’s not as dynamically keen as the Kia EV6, its stablemate in the brand’s ‘EV’ range, it shines far brighter than the Kia EV5 in terms of its on-road manners.Contributing Journalist Byron Mathioudakis voted for the EV3 due to “all the reasons we’ve already said, plus the fact it’s got a bit of an ‘It Factor’”.“The design, its proportions, just the level of detail that thing has is outstanding,” he added.It’s one of the more expensive entrants in the category, with its entry Standard Range Air variant starting from $47,600 before on-roads, but News Editor Dom Tripolone’s experience with the EV3 puts any ‘too expensive’ arguments to rest in the eyes of the judges.“I was able to put two child seats in the second row with a pram in the back very easily,” he said.“It’s a small car, but it feels like I’m buying a car a size above on the inside. That changes the value proposition in my book.”You can spend up to $63,950 for a top-spec GT-Line, but sticking with the entry grade is not only the best value, it’s also not missing anything important for the EV3 to be a fabulous step into the EV space.

On the cusp of five years since the Holden brand disappeared from the Australian new car landscape, a sixth-generation version of what would have been a key part of the Aussie icon’s 2026 line-up has been unveiled in Europe.The Holden Astra, a localised version of its then Opel Astra corporate GM cousin, was in local showrooms when the Lion Brand was finally shuttered in 2021.Now a sleek, all-new Opel Astra has gone on sale in Europe with pure-electric, hybrid and diesel options offered.Designed, developed and built at Opel's headquarters in Rüsselsheim, Germany, the newcomer is available as a five-door hatch and Sports Tourer wagon, claimed to boast upgraded tech, improved comfort and a more distinctive appearance, all with pricing unchanged.Opel said the design of the new car’s nose has been influenced by its Corsa GSE Vision Gran Turismo concept shown at last year’s IAA Mobility show in Munich, as have new 17- and 18-inch alloy rim designs finished in ‘Kontur White’ and ‘Klover Green’.A premium visual touch is an illuminated Opel Blitz (German for lightning) emblem as a centrepiece of the brand’s signature single-module front-end design while ‘Intelli-Lux HD’ headlights are claimed to comprise 50,000 LED elements.Interior highlights include a sweeping media and driver information screen display and ‘Intelli-Seats’ featuring a centre recess to reduce pressure on the tailbone. Powertrain options include the 115kW Astra Electric with a 58kWh battery delivering a claimed range of up to 454km (WLTP) and V2L functionality. A 107kW petrol-electric hybrid variant and a 96kW 1.5-litre diesel are also available. Pricing for the Opel Astra Electric hatch starts at €37,990 (~$63,900) with the hybrid at €32,990 (~$55,500).A shining star for current owner, Stellantis, Opel became profitable soon after its acquisition by the PSA Group (now Stellantis) in 2017, turning around close to two decades of losses under General Motors. Who knows what might have been if the Holden journey had continued?

The 86 was, when launched, extremely affordable but has since become more expensive, and getting into a top-spec version of the GR86 is a task that’ll sap $20,000 more from your wallet than the original 86 base model. To find out if it’s worthwhile, we’ve snagged a 2026 Toyota GR86 GTS with optional Dynamic Performance Pack.