Once-luxury features are rapidly migrating to compacts, as consumers switch to fuel-efficient vehicles, even if they don't have to.
"There are definitely higher content levels in these cars," said Edmunds senior analyst Bill Visnic. "That's an unmistakable trend."
That's helping to drive up prices on compacts, making them more profitable and U.S. carmakers less dependent on high-margin SUVs and pickup trucks. The average transaction price for compacts in July rose $1,376, or 7.1%, vs. a year ago, according to Edmunds. Car prices overall rose 3%, or $788. SUV prices gained just 2.4%, or $815.
Visnic estimates higher content levels make up 10%-15% of the rise, though others peg it at 20%.
Higher fuel prices made compact cars relatively more attractive than larger gas guzzlers. Supply woes from Japan's earthquake had an effect too.
Dealers can also push more options to early buyers than to less eager, later buyers.
Still, many buyers trading down from trucks or SUVs don't want to give up features like OnStar, satellite radio and navigation systems, said Lisa Hutchinson, GM (NYSE:GM - News) marketing director for the Chevrolet Cruze.
Compacts also have more powerful engines and extra safety features. Cruze has 10 air bags. Such adds have helped lift its average transaction price by $3,700 vs. the model that Cruze replaced.
Smaller details are making a difference with consumers too, like steering wheel controls and Bluetooth connections. The 2012 Cruze's nav package has a 7-inch touchscreen.
"It really gives another sense of refinement," Hutchinson said.
About one-fourth of Ford (NYSE:F - News) Fiestas sold have heated leather seats and moon roofs, said Robert Par ker, the company's small car group brand manager. Three-fourths are sold with the Synch media-smartphone connectivity system developed with Microsoft (NASDAQ:MSFT - News) .
The typical Fiesta buyer has about $9,000 in cash and trade-in value, he added, suggesting they can afford a more expensive car but are choosing to go small.
"It's not someone who has to buy the vehicle, but someone who wants to," Parker said.
Consumers giving up station wagons and SUVs also could be fueling the growing sales of small hatchbacks, which cost about $1,000 more than standard trims.
Average transaction prices on the new Focus compacts are 10%-15% higher than the previous year's model, Parker said.
Carmakers are rushing out "infotainment" or telematic systems similar to Ford's Synch. Hyundai offers its Blue Link system. GM, which pioneered the field with OnStar, has MyLink.
New features are moving from luxury models to compacts in as little time as a year, says Rebecca Lindland, director of strategic review at IHS Automotive.
The center of gravity in U.S. car sales is shifting from pickups and SUVs, said Edmunds' Visnic, adding that smaller crossover SUV sales have increased too.
But he sees compact features leveling off as automakers assess how sustainable their sales are. Buyers historically return to larger vehicles when gas prices fall.
"We see these kinds of swings all the time," he said.
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