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Shifting Expectations: The Evolution of Compacts & Subcompacts

Automakers pack more features than ever before into compacts and subcompacts to make them comparable with larger vehicles from a comfort and connected standpoint. Of course, that also means that you’ll pay more for these cars.

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If you haven’t shopped for a new vehicle in a while, the latest models of compacts and subcompacts might surprise you, because they’re far removed from the models that were available 5 years ago.

Four experts whom we interviewed point to the Corporate Average Fuel Economy (CAFE) standards that were set by the federal government in 2009 as the catalyst for the change. Jack Plunkett, who is the CEO of market-research company Plunkett Research, says the federal government’s requirement for automakers to increase the average fuel economy of their overall fleets to 54.5 mpg by 2025 forced manufacturers to produce more high-mileage (read: small) vehicles.

Of course, those cars also have to be desirable enough for consumers to want to buy them, so manufacturers have been packing compacts and subcompacts with features that until now were reserved for vehicles that are in much higher priced categories. These include Bluetooth connectivity for hands-free smartphone operation, LCD screens, active safety features and luxury features, such as heated steering wheels and leather seats.

The strategy worked. According to Automotive News Data Center, year-over-year sales of compacts jumped 9.3 percent in October 2014, and sales of subcompacts were up 11.5 percent year over year. Further, IHS notes that based on 2014 sales data, the Chevrolet Sonic and the Ford Fiesta outsold compacts and subcompacts from Honda, Hyundai and Toyota. Japanese automakers traditionally dominate the market for compacts and subcompacts.

If any doubt exists about how manufacturers view the importance of the compact and subcompact markets today, Thilo Koslowski, who is an automotive analyst at market-research company Gartner, points out that even premium automakers entered the markets. Analyst Mark Boyadjis of IHS agrees and notes the introduction of the 2013 Acura ILX ($25,900) and the 2014 BMW 2 Series ($32,100).

However, the upgrades to compacts and subcompacts also mean that you’ll pay more for cars that always have been the most affordable, and experts say you can expect those prices to climb.

TRICKED OUT. Compacts and subcompacts pack more into their bodies than ever before. Brandon Mason, who is an analyst at PricewaterhouseCooper’s Autofacts group, says that based on his company’s data, the most nontraditional common features that pop up on compacts and subcompacts today include Bluetooth connectivity, in-vehicle navigation, satellite radio, rearview cameras, lane-departure-warning and forward-collision-avoidance systems, heated seats and hands-free audio controls.

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Boyadjis says you have to look back only 5 years to be astounded by the evolution that’s transpired. Consider the subcompact Toyota Yaris, for example. For the 2010 model year, the base version of the Yaris ($12,605) came with a five-speed manual transmission, air conditioning, adjustable front seats and steering wheel, and a four-speaker sound system. Fast forward to the 2015 model year: The base Yaris ($14,845) now includes the above features plus an auxiliary input jack, power doors and locks, Bluetooth connectivity and a six-speaker sound system. All of the extra features were added within the past 3 years.

The evolution of the compact Honda Fit occurred even more quickly. The base version of the 2015 Fit ($15,650) includes as standard automatic headlights, Bluetooth connectivity, map lights, which illuminate specific areas inside of the car, a rearview camera that allows you to see objects that are behind you better, a smart-entertainment system and steering-wheel audio controls. Chris Martin of Honda says that 2 years ago, these features were either optional or unavailable on the $15,425 base version of the Fit.

In particular, Bluetooth connectivity has spread to even the least expensive models. The base models of the 2015 Nissan Versa Note compact ($14,180) and the 2015 Ford Fiesta subcompact ($14,455) are equipped with Bluetooth connectivity. Angie White of Toyota says consumers now expect Bluetooth connectivity to be included in their vehicle, along with other technology features that are considered to be premium, such as an LCD smart-entertainment system and voice recognition for smartphone and multimedia commands.

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