Nissan has priced its new Pulsar compact hatchback to undercut equivalent versions of the Ford Focus and Volkswagen Golf, the segment’s top-selling models.

The five-door Pulsar will start at £15,995 (€20,150) in the UK when it goes on sale in October, Nissan said. Prices for other European markets will be released in September and are expected to be roughly in line with those for the UK.

Nissan is adding 80,000 units of annual capacity for the Pulsar at its factory in Barcelona, Spain.

In the UK, the entry-level Pulsar with a 115-hp, 1.2-liter turbocharged gasoline engine will cost £900 less than the equivalent Focus with a downsized 1.0-liter three-cylinder petrol engine.

The cheapest five-door Golf fitted with a 1.2-liter engine is £1,635 more expensive than the cheapest Pulsar.

The Pulsar will also be available with a 1.5-liter diesel that matches the entry Focus diesel’s price of £17,495. The cheapest Golf diesel starts at £19,450.

Nissan described the pricing as “competitive” in a statement. The company has said the new car offers “class leading technology and interior space.”

The Pulsar is based on the joint Nissan-Renault CMF platform used by the Nissan X-Trail and Qashqai crossovers. The entry-level Qashqai uses the same 1.2-liter petrol engine as the Pulsar, but in the UK costs £2,000 more.

Germany is expected to be the Pulsar’s biggest market, followed by the UK, Nissan said.

Nissan has not sold a compact hatchback in western Europe since it dropped the poor-selling Almera in 2006. Launching a mainstream competitor in the key segment is crucial to achieving its goal of becoming the top-selling Asian automaker in Europe ahead of Toyota by 2016.