Honda Civic 2012 DCH Honda Lemon Grove

Auto Makers Sweeten the Recipe for Small Cars

Goodbye, Hand-Crank Windows and Hello, iPod Docks; Car Buyers' Interest in Compacts Rises Along with Gas Prices

The cheap-looking, cramped, "econobox" car is dead.

Auto makers are reinventing small, fuel-efficient cars for American drivers, just in time for another bout of angst caused by gasoline prices of $4 a gallon and up in many cities and forecasts that oil prices will rebound from their recent dip.

The new crop of small cars aim for 40 miles per gallon on the highway, while borrowing technology, styling ideas and creature comforts from luxury cars.

Heated rear seats? You can get them in a Hyundai Elantra. Rain-activated wipers and a rear-view camera? Available on a Ford Focus "Titanium" model. Voice-activated navigation, Bluetooth phone connections and built-in iPod docks? Yes, on the 2012 Honda Civic and other new models in the class.

The evolution of the economy car comes at a price. Someone who hasn't shopped for a compact in the last five or six years could be in for a jolt upon learning that a Hyundai or a Honda could cost more than $20,000.

But for that money, you get a car that is as far advanced from the beige 1982 Toyota Starlet I bought new to beat the gas-price crunch of the early 1980s as that quintessential econobox was from a Mercedes-Benz of its day.

"You've got content on this vehicle that you had to go buy a European luxury car to get," says Robert Parker, group marketing manager for small cars at Ford Motor Co.

Ford offers a dual-clutch, six-speed transmission on the Focus—a gearbox that delivers the fuel economy of a manual shifter without the requirement to manually change gears. "That was a supercar transmission five years ago," Mr. Parker says.

When I bought my Toyota Starlet, I fit the image of the economy car buyer. I was young, poorly paid and grateful merely to have a reliable car that sipped gasoline—never mind the tiny engine, hand-crank windows and lack of prestige conveyed by the car's boxy, hatchback profile.

Today, the average credit score of customers purchasing the redesigned 2011 Hyundai Elantra compact is 716—well within the range considered "good"—and average incomes are about $71,000 a year, compared to about $60,000 a year for the previous model, says John Krafcik, president of Korean auto maker Hyundai Motor Co.'s U.S. marketing arm.

"The single hottest model is the Elantra Limited with the NAV package," Mr. Krafcik says, referring to the top-of-the-line car with an in-dash navigation system that is sticker-priced at about $22,000. Ford's Mr. Parker describes a similar pattern for the 2012 Focus and its smaller cousin, the Fiesta.

Mike Jackson, chief executive of car retailer AutoNation Inc., says the response to the new small cars shows that consumers are willing to pay more for technology and innovative designs.

"These are vehicles people are proud to own," he says.

Honda Public Relations

The 1974 Civic started the cars expansion on the U.S. market.

I recently spent weekends in the 2012 Elantra and the just-launched 2012 Honda Civic to experience the dramatic evolution of the econobox.

The 2012 Civic is the ninth generation of the car that made Honda's reputation in the U.S. market. From 1973 to 1979, the tiny Civic and its ground-breaking "CVCC" engine, which met then-new U.S. clean air standards without a costly catalytic converter, put the Civic at No. 1 in the ranking of most-fuel-efficient cars just as oil embargoes and gas rationing were scaring consumers out of their Detroit gas guzzlers.

The styling of the Civic from 2006 to 2011 represented a bold step for Honda. The company turned away from a conventional "three box" design (the three squares represent the trunk, roof and hood) to what Honda calls "mono-form design" with a downward sloping hood, an arcing roof line and a split-level dashboard.

From 10 paces, the 2012 Civic's exterior looks a lot like the popular outgoing model. But inside, Honda has repackaged the seating and the cockpit to provide more rear-seat legroom and width at the level of passengers' shoulders.

Honda made other changes under the skin. The car is 7% lighter. A new electronic-steering system is linked to a stability-control system to help prevent skids and keep the car centered on the road. On the roads around Washington, D.C., a new Civic EX handles crisply, and its 140-horsepower, four-cylinder engine and five-speed automatic make for adept handling of merging and lane changes.

Better yet, the standard Civic's fuel efficiency is rated at 28 mpg in the city and 39 on the highway, an improvement in both measures. A special Civic HF model is rated at 41 mpg on the highway. There's also a Civic Hybrid, with a lithium-ion battery, rated at 44 mpg in the city and on the highway.