Despite fresh metal in the segment, the writing is on the wall for Australia’s small car class.
Sales are down across both the mainstream and premium small car segments.
The slide is significant too. More than just a result of held-up deliveries or model cycle changeovers.
To the end of November 2025, the Small Cars Under $40,000 sales class was down 23.6 per cent compared to the same time last year.
Premium small cars in the Over $40,000 category saw a similar drop, down 18.9 per cent.
In the mainstream segment, that category’s biggest sellers all took a hit.
Toyota Corolla sales were down 22.8 per cent, Hyundai i30 sales dropped 13.2 per cent, and Kia switched from the Cerato to the new K4 – essentially the same type of car, renamed for a new generation.
The combined sales for Cerato and K4 work out to a decline of 47.5 compared to Cerato’s 2024 year-to-date results.
In fact, the only model to show an improvement was the BYD Dolphin EV, up 58.2 per cent to the end of November 2025, with 2024 representing the model’s first full year on sale.
BYD’s result saw 2983 Dolphins delivered to the end of November, enough to outpace the MG 5 (1871), Subaru Impreza (1499) and Skoda Scala (234), and enough to make it the fifth-best seller in its segment.
But is the party over for small cars in Australia?
Full-year figures for the Small Cars Under $40,000 segment in 2024 saw 70,975 units delivered, a 14.8 per cent lift on 2023’s 61,840.
In the premium segment, sales were steadier. 2024’s 21,989 deliveries were down 2.4 per cent on the 22,520 in 2023.
2023’s results were down 14.9 per cent on 2022 in the Under $40K class, 2022 was down 19.7 per cent on 2021, and 2021 slid 7.6 per cent on 2020’s results.
In 2020 small cars under $40,000 accounted for 107,082 new car sales in Australia. In 2025 the segment is on track to be roughly half that figure. Representation in the segment is telling too.
In 2025 brands like BYD, Hyundai, Kia, Mazda, MG, Skoda, Subaru, and Toyota still maintain a presence in the small car class under $40K.
As buyers mature with the segment, the move has been smart for some. In 2020, VFACTS counted 10,067 premium new car sales. In 2025, to the end of November, the segment has already tallied 16,193 sales, with one month to go.
In that time, brands like Cupra, GWM, and MG are new to the Small Cars Over $40K segment, while Honda, Peugeot, and Renault all switched from mainstream to premium over the same timeframe, with Renault since having withdrawn from the segment entirely.
2025 saw Hyundai announce that the i30 hatch would exit the Australian market, leaving only the i30 N hot hatch and i30 Sedan range.
Kia’s slow start for the K4 saw the sedan launch first in a segment that favours hatchbacks.
The Mazda 3 range, meanwhile, with no change in supply or variants, held relatively steady in 2025. To the end of November, Mazda sold 9484 examples of the Mazda 3 hatch and sedan, compared to 9618 in the first 11 months of 2024, a drop of just 1.4 per cent.
For all of this though, it appears that small passenger cars, rather than small-sized vehicles in general, are on the nose with Aussie buyers.
Small SUVs Under $45,000 have surpassed 149,000 sales to the end of November (149,745). In 2020 the full-year figure for the segment was just 97,229 vehicles.
That 50,000-odd vehicle drop in small cars over the last five years lines up with a similar growth in the small SUV segment.
The change suggests that compact models retain the popularity they’ve long held in Australia, but the popularity of SUVs sees Aussie buyers drawn away from the traditional small hatch and sedan format and towards the often taller stance and higher seating position offered in a similarly-sized small SUV.
Kez Casey migrated from behind spare parts counters to writing about cars over ten years ago. Raised by a family of automotive workers, Kez grew up in workshops and panel shops before making the switch to reviews and road tests for The Motor Report, Drive and CarAdvice.
