The problem facing Ford and General Motors‘ Holden selling indigenous rear-drive models in Australia was highlighted by the March sales results as the Mercedes-Benz C-class outsold Ford’s Australian-built Falcon.

The Falcon and rival Holden Commodore hit new lows, Carsguide.com.au reported, as Ford’s one-time fleet and family favourite was outsold for the first time by the German luxury sedan costing far more.

Last month, the Commodore recorded its lowest sales result since the nameplate launched in 1978 – and was beaten by the (also locally produced) Toyota Camry for the fifth time.

Ford sold 831 Falcons (down 35%) versus 879 C-Class (up 69%) during a record month for the German model. The Commodore’s tally of 1606 sales was the Holden’s lowest ebb to date, Carsguide.com.au noted.

The report noted the Falcon and Commodore, once Australia’s top sellers, have been “hammered” by cheaper, smaller and more economical cars in recent years but March 2013 was the first month one of the homegrown pair had gone down to an expensive prestige car.

Mercedes-Benz in February launched a better-equipped A-Class hatchback at a lower price than the most basic Commodore – A$35,600.

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Meanwhile, the C-Class is now the third highest selling medium-sized car behind the mainstream Toyota Camry and Mazda 6.

The news coincided with the release this week of data detailing how much taxpayer funding Australia’s three remaining local car makers have received over the past 12 years. Holden received about twice as much government funding (A$2.17bn) as Ford ($1.1bn) and Toyota ($1.2bn) over the same period, even though it does not build as many cars as market leader Toyota.

All three car makers have gradually cutback their blue-collar workforces to meet falling demand for locally-made vehicles in recent years, Carsguide.com.au said, adding that more cuts were likely if new versions of the Commodore and Falcon don’t make a sales turnaround.

The Falcon, which can be traced back to the 1960 original based on the long-gone US version, was recently launched with a new, more fuel-efficient EcoBoost engine, the nameplate’s first I4 after generations of I6s and V8s. Holden offered an I4 in the Commodore – originally a variation of a German Opel – between 1980 and 1991 (latterly for export only) but has stuck with V6 and V8 engines since the VP series launched in 1991.

Toyota Australia sells the Camry with I4, I4 hybrid and V6 engines.