Micro car extinction watch: Countdown to zero

Nowadays, it’s a rare sight to see a small hatch – or even a sedan – driving among the sea of SUVs and dual-cab utes on most Aussie roads.

Since the micro car category was introduced in 2014, it has recorded a more than 50 per cent decline in the number sold, according to VFACTS data, and if that sales slump continues on the same trajectory, the category could be extinct by 2035.

There were 15,828 micro cars sold in the year to December 2014. On average, that number has reduced by about 750 each year, and though some years recorded an uptick, the overall trend is a decline.

In 2025, there was a near 20 per cent increase (from 6349 in 2024 to 7577) – which perhaps hinted at a resurgence for the category – however this year, it has begun with a sales slump.

Micro car sales dipped by 18.6 per cent in January 2026 – from 646 in January 2025 to 526 in January 2026.

Further compounding the issue is the fact that the field of players in the micro car segment has dwindled from nine different models in 2014, to just two sole competitors in the Fiat/Abarth 500 and Kia Picanto, with the latter eating up a lion’s share of the market category in the past five years.

The Kia Picanto, which is the cheapest new car in the market, took up 95.4 per cent of the segment in January, with 616 of the 646 cars sold.

So is it time to start the doomsday clock for micro cars in Australia? Well, according to the brand keeping it alive, not just yet.

"It is here to stay for many years. It may get some new powertrain considerations in the future, but the Picanto nameplate isn't going anywhere," Kia Australia head of product planning Roland Rivero told Drive.

Though the Picanto exists in a market where SUVs and dual-cab utes reign supreme, Rivero said the Picanto was the right entry point for new customers.

"You can argue that both micro and light cars are very much on the decline in totality, but we don't just look at it that way. We look at it as, we've got a good product and it adds value to the Kia brand, and that's what the Picanto does. It's an entry into the Kia brand," he said.

While Rivero acknowledged that most Australian consumers are showing their preference for bigger cars, the brand believes there's still enough demand to continue retaining the pint-sized hatch in its local line-up.

"There are still customers out there that, yes, they're not in as great masses as perhaps in years gone by, but there are still customers that appreciate a small little runabout urban dweller," he said.

Ethan Cardinal graduated with a Journalism degree in 2020 from La Trobe University and has been working in the fashion industry as a freelance writer prior to joining Drive in 2023. Ethan greatly enjoys investigating and reporting on the cross sections between automotive, lifestyle and culture. Ethan relishes the opportunity to explore how deep cars are intertwined within different industries and how they could affect both casual readers and car enthusiasts.

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