Stand by for small-car price war

A perfect storm is brewing for small-car bargains.

The Toyota Corolla and Mazda3 are battling for top-seller status in the last few weeks of 2014 at the same time as dealers are trying to clear this year’s stock.

Pressure will be on prices as the top-two sellers come under the discount knife – and other brands will also be forced to slash prices to compete.

The reigning champion, the Toyota Corolla, overtook the Mazda3 in the year-to-date tally in July by just 21 sales – but the pair have swapped the monthly sales lead three times in the past four months.

Official sales figures due to be released midday Wednesday are expected to show the Mazda3 narrowly outsold the Toyota Corolla in November (3500 versus 3265 deliveries).

But the Corolla still has the edge when the year-to-date tally is counted (40,190 versus 39,510 deliveries).

If the Toyota Corolla becomes our top-seller it will be only the second time as Australia’s favourite car after the Mazda3 had back to back wins in the two years prior, having ended the Holden Commodore’s 15-year winning streak.

The preliminary figures show the downturn in new-car sales continued in November with seven of the Top 10 brand posting sales declines.

It will be the 10th month this year there has been a decline -- by 4.8 per cent compared with the same month last year, to 92,232 deliveries.

This is the longest market slowdown since the Global Financial Crisis.

However, despite weakening sales the new-car tally has once again eclipsed the 1 million mark, with 1,016,421 deliveries year-to-date, down 2.2 per cent compared with the first eleven months last year.

Market leader Toyota was down 11.6 per cent and Holden was down by a staggering 25 per cent, when compared with the same month last year.

Holden’s dramatic fall from grace was enough to elevate South Korean car maker Hyundai to second place for the second month in a row.

Japanese maker Mazda rounded out the top three ahead of Holden, although its sales were down by 3.4 per cent.

Industry pundits believe Holden will be battling for fourth or fifth place with its old rival Ford by this time next year, as weakening sales of its locally-made models and an ageing imported vehicle line-up drag down sales.