Small cars used to be manufactured for buyers looking for cheap transportation.  A decade ago, it was possible to buy half a dozen small cars without even power windows or rear defrosters.  Those willing to spend more on options were buying SUVs, or midsize and large cars.  In today's market, however, middle class buyers and even the wealthy are downsizing.  These buyers are looking for smaller cars that get higher mpg.  They are not, however, looking for manual-crank windows or vinyl seats.  Buyers are now interested in small cars with big-car amenities, and manufacturers are trying to meet their expectations.

Kicking Tires reports, "This is a small bit of good news for automakers in otherwise dismal times. The reason car companies stuck with big gas-guzzlers for so long is because the profit margin on these behemoths is far greater than it is on small cars — as much as $10,000 for large trucks and SUVs.  On cars with smaller profit margins, added options are one of the few ways dealers can turn larger profits. After all, $400 for a navigation system, $600 for a sunroof, $500 for satellite radio -- those options really start to add up."

The New York Times reports, "Dealers have caught on to the trend, and "are stocking their lots with more upgraded vehicles." 

They need to.  Buyers aren't willing to wait to special-order a well-equipped small car.  Dealers tell the Times that buyers are "so eager" to get into smaller cars that they will often settle for whatever model the dealer has on the lot currently, "usually at a higher price, so they did not have to keep driving an S.U.V." 

From the dealer's end, the difference between a lower-trim small car and a more luxurious one is significant.  "The $11,550 sticker price on a basic Yaris hatchback, Toyota's smallest car, gives [a] dealership $340 in profit," according to D.J. Smith of Panama City Toyota in Florida. "But that more than doubles, to $800, for a top-of-the-line Yaris priced around $17,000."  

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