Kia pledges not to desert sub-$20,000 segment as four of the Top 5 brands bail on bargain hunters

South Korean car giant Kia has vowed to keep its most affordable models for the foreseeable future as Toyota, Mazda, Ford and Hyundai ditch budget-priced cars.

Four of Australia’s top five car brands have vacated the budget-price segment of the market – with Toyota, Mazda, Ford and Hyundai no longer offering vehicles priced below $20,000 for the first time in their automotive history.

However, South Korean car giant Kia – one of the fastest-growing brands in Australia over the past seven years, and a sister brand to Hyundai – has made a pledge to budget-conscious buyers that it won’t leave them stranded.

“We will always continue to give value to the Australian market … we’re committed to the (affordable) passenger car market for as long as possible,” said Kia Australia boss Damien Meredith in a roundtable meeting with media this week.

“We believe it’s one of our strengths, as a matter of fact we know it’s one of our strengths. Our strategy has always been to build our market share in passenger vehicles and ride the SUV (sales growth) wave.”

When asked if the plan was to retain its current price leaders, the Kia executive said “we will have three models under $25,000.”

Kia had two models priced under $20,000 until recently, starting with the Kia Picanto from $17,990 drive-away.

The Kia Rio was also previously priced from $17,990 drive-away but has now just eclipsed the $20,000 barrier, starting from $20,490 drive-away.

After two decades of record low car prices, the automotive industry has largely vacated the sub-$20,000 segment because, many brands argue, it costs as much to develop and manufacture a sub $20,000 car as it does to develop and manufacture a sub $30,000 car. But the profits are higher on dearer cars.

The new Toyota Yaris (pictured above) and Mazda2 hatchbacks now start from in excess of $20,000, the cheapest car in Hyundai’s range is the Venue priced from $20,940 plus on-road costs, and Ford dropped its entry level Fiesta years ago.

The only Top 5 brand with a sub-$20,000 car currently is Mitsubishi with its Mirage (pictured below), priced from $17,490 drive-away.

Sales of sub-$20,000 have plummeted as buyers shift towards SUVs of all shapes and sizes.

Joshua Dowling has been a motoring journalist for more than 20 years, spending most of that time working for The Sydney Morning Herald (as motoring editor and one of the early members of the Drive team), and then News Corp Australia. He has been with CarAdvice since late 2018 and is a World Car of the Year judge. 

Joshua covers motoring news, car reviews and comparison tests – and has a keen interest in all aspects of the automotive industry, including price movements, sales data and consumer protection. He assesses in excess of 150 cars per year to stay current with new models. 

When working for News Corp Australia he covered the factory shutdowns of the Ford, Toyota and Holden factories in 2016 and 2017 – and the debate leading up to those decisions, including interviewing global executives in Detroit. Dowling also broke the news in early 2020 that Holden would exit Australia for good, ahead of other mainstream media and motoring media outlets. 

Dowling has a passion for affordable cars and commercial vehicles and, in particular, double cab utes. He believes electric cars will eventually become a part of our motoring lives – once cost and range anxiety issues are resolved. 

See all of Joshua’s articles

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