Compact Luxury: Upscale new models pack plenty of style and amenities in smaller packages

There was once a time when size was what separated luxury vehicles from the rest of the herd. “Bigger” simply meant “better.”

Not anymore.

Upscale automakers from Audi to Cadillac are shaking up the luxury car world by rolling out smarter vehicles with smaller bodies and engines that achieve better gas mileage — but not at the expense of the speed, performance or amenities you’d expect from a high-end marque.

So why are luxury carmakers shrinking some of their vehicles?

“Fuel economy is certainly one reason,” Edmunds.com senior editor John O’Dell said. “Another reason could be that entry-level models give car shoppers the opportunity to own a premium-brand vehicle without running afoul of their finances.”

Another reason: a shift in public perception. “Automakers have recognized that if they build a smaller and more affordable luxury car right, it doesn’t hurt the brand’s image,” Cars.com executive editor Joe Wiesenfelder said.

With a base sticker price less than $30,000, the all-new 2014 Mercedes-Benz CLA is the smallest and least expensive offering from the German luxury carmaker. The diamond-block grille, sweeping taillights, 17-inch alloy wheels and aerodynamic body give the four-door coupe a commanding, shark-like appearance that appeals to younger drivers who crave something meaner-looking than their daddy’s Benz.

Under the hood is a turbocharged 2.0-liter four-cylinder engine that cranks out 208 horsepower, and at the driver’s seat, a seven-speed automated manual transmission with shift paddles gives the CLA sports-car-like handling. The passenger cabin is equipped with everything you’d expect from a Benz — leatherette vinyl upholstery, high-backed power front seats and premium sound and communication systems.

Elsewhere in Germany, the latest incarnation of the Audi A3 is more comfortable, higher-tech and sportier than ever before and, like the CLA, obviously aimed at younger drivers with a little money to burn.

Firmly planted in the 21st century, the new A3 bristles with technology. The standard NVIDIA graphics processing unit generates three-dimensional images used in all of the vehicle’s online, voice control, media navigation and telephone functions, and a special phone box under the center armrest boosts cellular coverage by wirelessly coupling to a specialized antenna in the rear windshield. Drive select allows the driver to adjust throttle response, shift points and electromechanical steering in four settings.

The basic A3 hatchback version debuted in Europe late last year. Since then, Audi has been busy rolling out other models, including a five-door “Sportback” and a brand-new A3 notchback sedan. Waiting in the wings are a cabriolet, a hybrid plug-in called the E-tron and a natural-gas-powered A3 called the G-tron. All of them are expected to reach U.S. showrooms next year, starting with the A3 sedan during the first quarter of 2014.

Another German automaker, BMW, is famous for having crafted one of the smallest, lightest and cutest cars of all time: the Isetta (1956 through ’62), with its single front-opening door. The company went big and bold after that. But nowadays, BMW, like everyone else, is scaling back sizes and prices.

Finally making its way from the drawing board to the street, the BMW i3 is set to debut in the U.S. next year. This all-electric five-door compact sedan is the first-ever zero-emissions BMW and the smallest car the Bavarian automaker has launched since the Isetta.

Back in the U.S., Cadillac beat the Germans to the punch when it introduced the ATS late last year. Dubbed the “Baby Caddie” by auto pundits, the four-door sports sedan is the smallest, lightest Cadillac of all. But it’s packed full of high-tech offerings and has plenty of power under the hood.

Buyers can choose from three different engines, ranging from the fuel-efficient 2.0-liter turbo to an award-winning 3.6-liter V-6 that churns out 321 horsepower. ZF premium electric steering and a limited-slip rear differential endow the ATS with sports-car handling. Inside, the Cadillac User Experience boasts industry-first technologies such as natural voice recognition and an intuitive interface so advanced the touchscreen senses the approach of your fingers before they even get there.

The BMW i3 costs more than $40,000, but MSRPs for the CLA, A3 and ATS hover around the $30,000 mark.

“That’s about the same neighborhood as a generously appointed Camry,” O’Dell said. “Unlike the Camry, though, these luxury starters have more personality and brand cachet.”

Joe Yogerst, Brand Publishing Writer

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