It's a toss between two german makes
Good deals on wheels - Hatchbacks The second-generation BMW 1-series is a far better car than its predecessor

This is a segment fiercely contested by two German makes.

After a long dominance, the VW Golf, arguably the most iconic of all hatchbacks, has finally met its match. The second-generation BMW 1-series is now a far better car than its predecessor.

Its steering is no longer heavy at parking speeds. Rear legroom is now tolerable, as opposed to the laughable 2+2 rear accommodation in the previous model. Ride is remarkably good for a relatively small car. Of the various 1.6-litre variants available, the best bet would be the 118i ($188,800). The 1-series remains the only rear-wheel-driven hatchback in the segment.

The Golf has better rear legroom but a less illustrious badge. It is available in a wide range of variants, with the 1.4 Sport ($150,300) the best all-rounder. Its 1.4-litre engine may be diminutive but with twin-charging, it delivers 180bhp yet remains surprisingly economical. 

However, for those with deeper pockets, the iconic GTI is now better than ever. To celebrate its 35th birthday, the GTI Edition 35 ($205,300,left) sparkles with 235 horses and a true blue- blooded pedigree.

The 1-series and Golf still cost more than many can afford. For those on tight budgets, the hatchback to buy is the Suzuki Swift ($93,500, right).

The new model may look quite a bit like the old one but has significantly improved economy, ride comfort and build quality.