Safety tech drives demise of cheap cars

CHEAP cars are disappearing from showrooms as manufacturers pull out of the hatchback market and increase prices to meet safety standards.

Car makers such as Ford, Honda, Hyundai, Nissan and Renault have abandoned sub$20,000 hatchbacks to focus on comparatively expensive, high-riding SUVs.

Other brands such as Toyota say increasingly stringent requirements force them to position entry-level cars out of the reach of budget buyers.

Toyota sparked controversy last week when it announced the new Yaris hatch would cost almost 44 per cent more than its predecessor, rising from $15,390 to $22,190 plus on-road costs in basic manual trim.

Toyota’s vice-president for sales and marketing Sean Hanley said technology such as auto emergency braking, lane-keeping assistance and innovative airbags between driver and passenger pushed the cheapest Yaris auto models past $27,000 drive-away.

“This is the cost of bringing a car of this nature to market now,” Mr Hanley said.

“If in the event someone can’t afford that, the credible alternative we’re seeing is a Toyota certified pre-owned vehicle. It’s a choice.”

The most popular light car in Australia is a back-to-basics Chinese-built MG3, priced from $16,690 drive-away in automatic trim. The MG3 has no safety rating issued by the Australasian New Car Assessment Program (ANCAP).

ANCAP raises its minimum standards for a five-star rating each year. Andy Cornish, chair of the independent body, said safety-related costs are “undoubtedly a factor in vehicle pricing” but only one “relatively small” component.

Modern engines have increasingly complex emissions management systems and many new models have costly features such as iPad-like touchscreens.

Kia is one of the few brands committed to sub-$20,000 new cars in Australia, offering Picanto and Rio hatchbacks.