Cheap small hatchbacks are disappearing in Australia! But this affordable icon is sticking around for a little while yet

The cheaper end of the Australian new-car market is shrinking at a rapid rate, and now it’s even smaller.

Fiat has just confirmed that it will trim its retro-inspired 500 hatchback line-up down to one model grade - the Dolcevita, from an unchanged $27,220 before on-road costs.

That means, of the petrol-powered model grades, the $23,100 range-opening Lounge has been dropped. The drop-top versions were discontinued a while back.

Those with long memories might recall when the 500 retailed for $17,000 before on-roads back in 2014.

Of course, Fiat has also expanded the 500 range with the recent launch of the all-electric 500e and the sporty Abarth 500e, from $52,500 and $58,900 respectively.

But when it comes to affordable micro and light cars, there are not many options left.

Kia is still dominating the micro car space with its cheap and cheerful Picanto, from $16,290 (BOC) in S manual guise. But the recent discontinuation of the Mitsubishi Mirage means there are fewer options.

Rumour has it that Hyundai is looking very closely at the adorable Casper hatch that would compete with the Picanto, but that’s about it on the micro hatch front.

There are of course EVs like the 500e, and Mitsubishi is also considering introducing the ek-X electric kei car here, but that will be priced well above $25,000.

Even options in the light car class have disappeared. Long-running nameplates like the Ford Fiesta, Holden Barina, Honda Jazz, Renault Clio, Nissan Micra, Peugeot 208 and more have been dropped in recent years.

MG is selling as many MG3s as it can get its hands on, and given it starts from $19,990 drive-away, it’s currently the best-selling light car in Australia by a country mile, with more than 10,000 units sold so far this year.

Back to the Fiat 500. It’s been around in its current guise - albeit with a long list of updates and improvements along the way - since early 2008. That’s more than 15 years!

So what do you get in the latest version? As well as a 51kW 1.2-litre petrol engine paired with a five-speed automatic transmission, you get a sunroof with a blind, LED DRLs and fog-lights, power adjustable heated mirrors, eight different exterior colours and newly designed black fabric interior trim.

It also has a 7.0-inch instrument cluster display and a 7.0-inch digital touchscreen with Apple CarPly and Android Auto, Bluetooth and a body-coloured dashboard.

There’s not much to talk about when it comes to safety, but it has cruise control, tyre pressure monitor, rear parking sensors and a speed limiter.