The Wall Street Journal-20080131-Reinventing the Wheel- SUVs in Small- Luxury Packages

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Reinventing the Wheel: SUVs in Small, Luxury Packages

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[The latest car trends]

-- What It Is: Small sport-utility vehicles have long been regarded as rolling compromises, never as rugged, roomy or capable as larger traditional trucks or some minivans. And they largely missed out on the boom in luxury SUVs, until now. A new crop of small "premium" utility vehicles has appeared in the past year or so, loaded with plush leather-and-wood interiors, more powerful engines and the latest creature comforts and electronic gadgets. In the past it has been difficult or often impossible to get certain luxury equipment like navigation systems, rear-view cameras and voice-activated controls on small SUVs because makers viewed them almost universally as economy models. The segment is still tiny, accounting for less than half of a percentage point of total passenger vehicle sales in the U.S. last year. But this niche category is becoming increasingly important to car makers looking for new ways to revive sales that have been flagging in recent years.

-- How to Get It: New models such as the Infiniti EX35 and Land Rover LR2 have gone on sale in the past year. The GLK from Mercedes- Benz, which looks like a shrunken version of the company's large GL Class SUV, is due in dealerships in early 2009. Many consumers will get to know the GLK sooner, though, because it appears in the "Sex and the City" movie due to open this spring. Before Acura's RDX arrived in late 2006 as a 2007 model, the only small utility widely considered high end was the BMW X3. German luxury maker Audi is expected to roll out a model similar to the X3 in a year or so.

-- Upside: The market for small luxury sport-utility vehicles barely existed two years ago, so just about anything in the segment seems new. Luxury compact utility vehicles could be just the thing for drivers seeking all-wheel drive, power and a high SUV-style seating position in a smaller, more fuel-efficient vehicle. The new models also help break consumers of the assumption that small size and luxury are mutually exclusive qualities among SUVs. Some of these models are based on surprisingly high-end hardware. The Land Rover LR2, for example, shares its basic chassis with Volvo's Flagship sedan, the S80. Volvo and Land Rover are, for now, units of Ford Motor Co.

-- Downside: Adding luxury touches like thick seats and consoles stuffed with screens, dials and other electronics can make a small vehicle seem even smaller. So where a frugal, minimally adorned interior of a Honda CR-V seems airy, its relative RDX can seem cramped. While a smaller SUV-like crossover is bit more fuel efficient than bigger vehicles, the difference can be disappointing.

-- Cost: Prices range from $33,195 for the Acura to $38,000 for the BMW X3 and are comparable with the cost of imported sport sedans like the Audi A4 or BMW 3-Series. As with those cars, adding options easily boosts prices above $40,000.