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Demand for Australia’s cheapest new car – and one of two new vehicles still available for less than $20,000 drive-away – is at record levels.

Australian buyers are proving there is still strong demand for new cars priced from less than $20,000 with record orders and deliveries for the Kia Picanto, one of just two new models remaining under the threshold.

VFACTS industry sales data shows 978 Kia Picanto city hatchbacks were reported as sold last month, representing a new record, and up 54 per cent on the same month last year.

Kia Australia says it is both a boost in production fulfilling existing backorders – and new orders being written at a “record level”.

South Korea’s Kia Picanto is one of two new cars priced less than $20,000 – no matter whether on-road costs such as registration and stamp duty are included – alongside the MG 3 from China, which reported 1153 sales (deliveries) last month.

Rising manufacturing and shipping costs over the COVID-19 pandemic – as well as more stringent safety requirements, and the market’s expectation for crash-avoidance technology as standard – have made sub-$20,000 new cars almost extinct.

In 2019 buyers with $20,000 to spend could choose from more than 60 vehicles across 19 models and 14 manufacturers – including Fiat, Honda, Hyundai, Mazda, Mitsubishi, Suzuki and Toyota.

Today only MG and Kia remain, with five model grades priced less than $20,000 before on-road costs, and just three model grades priced less than $20,000 drive-away (MG 3 Core auto, Kia Picanto S manual and auto).

However the top seller is the better-equipped GT-Line (56 per cent of the mix), priced from $17,740 plus on-roads/$20,390 drive-away with a manual, or $19,340 plus on-roads/$21,390 drive-away with an auto.

But over the next 18 months – as new or updated models arrive – the South Korean and Chinese car makers may turn off the lights in the sub-$20,000 category for good.

An updated Kia Picanto (below) is due by the end of this year, with more crash-avoidance technology as standard that may push it above the $20,000 threshold.

The cheapest version of the current MG 3 is priced from $19,990 drive-away, after receiving its fifth price rise in two years in July 2023, amounting to a $4000 hike in four years with no new features.

It is the base-model MG 3 – the Core (without sat-nav) – that is the most popular, accounting for 55 per cent of deliveries in the first three months of last year, and helping the Chinese city hatch remain the top seller in the “light car under $30,000” category for the past three years in a row.

Kia Australia says improved supply means buyers who place a new Picanto order today “can anticipate production the following month plus shipping,” a company spokesperson told Drive.

Alex Misoyannis

Alex Misoyannis has been writing about cars since 2017, when he started his own website, Redline. He contributed for Drive in 2018, before joining CarAdvice in 2019, becoming a regular contributing journalist within the news team in 2020.

Cars have played a central role throughout Alex’s life, from flicking through car magazines at a young age, to growing up around performance vehicles in a car-loving family.

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