The entry-level luxury category is also known as the compact executive car in Britain and (Mittelklasse in German). In the US, this segment mostly includes the bottom vehicles in the line-up of luxury brands as well as the top-of-the-line models of some non-luxury brands.
Dimensionally, compact executive cars are smaller than mid-size/large family cars, and sometimes even smaller than compact cars. Mass market compact cars typically use the economical front wheel drive transverse engine layout, well suited to the inline-4 engine, which also maximizes interior room. Several compact executive cars are rear-wheel drive with longitudinal engines, for improved stability and handling, and in order to accommodate the larger size of higher-performance engines (straight-6, V6, rarely V8), with four-wheel drive often being available. Compact executive cars also tend have more complicated independent suspensions, sportier transmissions, and high revolution engines that may require premium gasoline. The more complex powertrain and mechanical layouts of compact executive cars comes at increased cost and reduced interior passenger and trunk space.
Compact executive cars include the Volvo S60, Acura TSX, Lexus IS, BMW 3 Series, and Mercedes-Benz C-Class which particularly emphasize sporty handling.
Other vehicles such as the Lexus ES, Acura TL, and Buick LaCrosse are also considered entry-level luxury in the United States and Canada, being similar in price to the BMW 3 Series and Mercedes-Benz C-Class. However, the ES, TL, and LaCrosse are not sold in Europe and do not fall under European luxury classifications. The ES and TL actually began as badge engineered versions of the midsize Toyota Camry and Honda Accord, respectively, retaining the front wheel drive transverse engine layout, whereas Toyota's current Lexus IS does not share a platform with mass market Toyota cars. The ES and TL are not considered executive cars either, despite similar dimensions, since executive cars usually emphasize higher performance, often being rear-wheel drive with longitudinal engines. the present iterations of the ES and LaCrosse emphasize "comfortable, reasonably priced luxury", while the TL has recently been targeted at the entry-level luxury sport market.
Recently, the entry-level luxury has been very competitive, and there has been price-overlapping with well-equipped non-luxury cars. The bestselling vehicles of the marque are frequently compact executive cars, such as the BMW 3 Series that makes up 40% of the vehicles that BMW sells worldwide.