VW Golf price attack on Corolla, Mazda3

The battle for small-car sales in Australian has taken to the high seas.

Volkswagen has freighter ships on the water carrying new cut-price Golf hatchbacks that will sell from $21,990 plus on-road costs – or about $24,990 drive-away.

They are due to land on Australian shores in the first week of October. Dealers were warned of the arrival at an extraordinary meeting last week.

It means the starting price for a new Golf is now within reach of buyers who are also shopping for Australia's top selling small cars such as the Toyota Corolla, Mazda3 and Holden Cruze.

The Honda Civic is also in Volkswagen's cross hairs.

It also slashes the starting price of the Golf by $3000.

"We cannot say how many we are bringing in, but we have enough to make a nice impact for launch," Anke Koeckler, the managing director of VW Australia, told a group of Australian media in Wolfsburg overnight.

"It will not become our biggest selling model … [but] it is there for people who wanted a new Golf but until now could not afford it."

The car comes fully equipped with six airbags and five star safety, air-conditioning, remote entry and CD player. But there is a catch: it is powered by a 1.2-litre four-cylinder engine with a modest power output of 77kW – despite being turbocharged.

It is the same engine that powers the base model VW Polo. In that car, it propels the Polo from rest to 100km/h in 9.7 seconds. In the Golf, it does the same task in a slightly more leisurely 10.6 seconds.

But chances are the extra time will allow Golf 1.2 owners to reflect on how much fuel they're not using.

The cut-price Golf sips just 5.7L/100km for the six-speed manual and 5.8L/100km for the optional seven-speed DSG (which costs $2500 extra). Both of these fuel figures are barely more than the Polo with the same engine (5.5L/100km).

The downside to these economy numbers are that cost-conscious Golf buyers must pay for the dearer, premium unleaded petrol every time they fill up.

With the arrival of the 1.2 turbo Golf, the 1.4 turbo Golf (previously the price leader at $24,990 plus on road costs) gains alloy wheels, cruise control and a multi-function steering wheel while maintaining its price.

Volkswagen says the Golf pricing move is part of its global growth plans, including a doubling of sales in Australia by 2018.

"This is the right time to compete with our main competitors in this segment such as Mazda," Koeckler said. "Look at the Polo at $16,990 which we already introduced. We are already with Mazda and we have more plans and more cars coming."

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