Only a handful of years ago, light-sized cars formed a formidable segment in the Australian new-vehicle market, second only to small cars as the biggest-selling class with a 13 per cent share and more than 130,000 sales a year.

These bantamweights reached a high point of 137,916 sales in 2010, for a 13.3 per cent share, fighting back to similar volume in 2012 after a 4.0 per cent hit to sales in 2011, but their grip on the market was slipping by that stage and from then on have been overrun by a variety of other segments.

Market Insight: Small and light cars – Click to enlarge

While the migration away from family-sized passenger cars has knocked out the Australian motor vehicle manufacturing industry, large imported utilities and SUVs of various shapes and sizes – small, medium and large – have benefited most as consumers switched allegiance.

The nation’s biggest-selling segment, small cars, has also been on a downward turn, but not nearly to the same extent as light or ‘micro’ cars combined (the latter defined by a separate category since 2014), with a variety of factors at play here – from intense market competition at the high-volume entry point of the small-car brigade to the current period of economic stability and relatively steady fuel prices.

A 5.0 per cent fall in light and micro cars sales combined this year will see the segment (still defined as a single category for the purposes of this report) fall below 100,000 sales for the first time in more than a decade (2005), and already the audience is walking out: the segment is down 14.3 per cent after the first two months of trading.

Last year, the light/micro segment plummeted 14.2 per cent to 105,228 units, its fourth negative annual return in succession and one which saw its share of the overall marketplace fall to less than nine per cent (8.9) – enough for only sixth position as the unrelenting small SUVs (9.4) knocked it out of the top five.

Let there be light: Suzuki has a lot riding on the new Swift unveiled in Geneva this month, with the current model’s sales down 23.3 per cent last year (and 56.9 per cent YTD) which is symptomatic of the segment as a whole.

That leaves small cars as the only passenger car segment at the pointy end of the market, still well out in front with 19.1 per cent share (as at the end of last year), although its dominant share and overall sales have both been trending downward since 2013.

The mid-size SUV segment was in second place last year with a 14.6 per cent share, up from 12.8 in 2015, while 4×4 pick-up/cab-chassis regained third position from large SUVs with a small resurgence to 12.5 per cent (compared to large SUVs steady on 12.1), bringing the dominant ute segment back to the around the same mark which saw it overtake light cars in 2013 – although it is still surrounded by various classes of SUV that are showing no signs of fatigue.

Only those mainstream automotive brands that do not have mass-selling new models in the burgeoning SUV segments stand to lose from the unenviable position the light-car segment is now in, with most simply accepting the shift in the marketplace and diverting their attention to these new channels in terms of supply lines, product mix, sales and marketing budgets, and so on.

Several have already discontinued slow-selling light sedan variants – among them, booted versions of the Mitsubishi Mirage, Kia Rio, Toyota Yaris and Holden Barina – while others are remaining noncommittal about renewing their current offerings with new-generation models now available.

Toyota Yaris

Nissan Australia managing director and CEO Richard Emery told GoAuto this week that the company was not prepared to take the new fifth-generation Micra – unveiled at the Paris motor show last September – after cutting the previous model from the local line-up last year for reasons as varied as its ageing platform and powertrain and lack of adequate specification compared with newer rivals such as the Holden Spark and Kia Picanto.

“As it stands at the moment, the car (new Micra) is not appropriate for the Australian market due to engine and spec choice,” Mr Emery said. “It’s only manual for now, and it is a bit expensive and is not offered in the right spec.”

As GoAuto has reported, there are also question marks over whether Ford will bring the new-generation Fiesta to Australia, following its launch last year.

“What you’ll see in Europe is a European outcome,” Ford Australia president and CEO Graeme Whickman told us earlier this month.

Mitsubishi Mirage

“Things will play out over time. We see global vehicles come through, we’re a global company, as you would expect. When we’re ready to talk about the Fiesta, we’ll come and chat with you.”

Elsewhere among the big-name players, Kia – which is determined to cement its position as one of Australia’s top-10 brands – recently launched its redesigned Rio and has high aspirations for its new-generation pint-sized Picanto that arrives here in April, while earlier this month Toyota introduced its updated Yaris range.

The extent to which the market-leading motor company cranks up its formidable marketing machine for Yaris is still to be seen – the all-new C-HR small SUV is the main focus for now – but there is sure to be a desire to improve the hatchback’s sales, which currently place it behind Hyundai’s Accent and the Mazda2.

Accent led the segment last year with 18,703 units, with Mazda2 on 13,639 and Yaris next on 12,158. In 2010, Toyota shifted 21,452 examples of the Yaris – a figure that even then wasn’t enough for segment leadership, with the Hyundai Getz (at $12,990 driveaway) beyond 21,500.

A new-generation Accent is due in Australia later this year, while other notable launches ahead include the redesigned Suzuki Swift – due mid-year after its debut at the Geneva motor show earlier this month, and a crucial entrant given its status as Suzuki’s top-selling model – and the ‘Series 4’ version of the Fiat 500, which is expected in the second half.

But as buyers increasingly expect higher levels of technology, and as mass-market brands look to eke more profitability out of each of their model lines, including light cars, the smallest vehicles in the marketplace are unlikely to ever fully untangle themselves from ropes – until perhaps the next global oil crisis sets alarm bells ringing.

By Terry Martin

Market Insight: Small and light cars – Click to enlarge