DETROIT – General Motors Co. unveils later today the new-for-’12 Chevrolet Sonic at the North American International Auto Show here, the most substantial and first homegrown small car from the auto maker.

Production of the Sonic sedan and 5-door model, which will replace the Korean-built Aveo at the lowest rung of GM’s vehicle portfolio, begins later this year at its Orion Twp., MI, assembly plant.

GM invested some $545 million to the facility, located about 35 miles (56 km) north of the company’s Detroit headquarters, to make way for production of the Sonic and a new small car for Buick called the Verano that also will be revealed later today.

The auto maker reworked a local contract with United Auto Workers union members at Orion to produce the Sonic less expensively.

The low price tags for compact cars previously made profitable production of the vehicles in the U.S. almost impossible. But more flexible work rules and UAW wages nearly half their former rate gives GM a chance.

Expect the Sonic to also command a higher price in the market, as it follows the new industry trend away from thrifty econoboxes. For example, the all-new, feature-rich Ford Fiesta arriving at dealers now as an ’11 model starts at $13,320 – a full $1,205 more than the Aveo.

“We believe the Sonic will bring substance to the segment, with progressive styling, performance and value that will change perceptions of what a small car can be in America,” says Chevy marketing chief Chris Perry during a recent sneak peak of the car ahead of the show.

Dealers tell Ward’s they’re looking forward to a more competitive entry-level product from GM.

“It would give us more of a volume play,” one metropolitan Texas Chevy dealer says. “We could use something better, fresher than what we have now.”

Last year, the Aveo racked up deliveries of 48,623 units in the U.S., a distant third to the Nissan Versa and its 99,705 sales, according to Ward’s data.

The Versa controls 34.2% of the Ward’s Lower Small segment, followed by the Hyundai Accent with 17.8% and the Aveo commanding 16.7%

The biggest improvement over its predecessor comes under the Sonic’s hood. In place of the Aveo’s buzzy, 108-hp 4-cyl. engine, GM will offer a choice of two motors borrowed from the bigger Chevy Cruze – a 135-hp 1.8L 4-cyl. and an optional 138-hp turbocharged 1.4L 4-cyl.

Models equipped with the 1.8L engine are equipped with either a 5-speed manual or optional 6-speed automatic transmission, while those outfitted with the 1.4L turbo get a 6-speed manual.

GM does not offer fuel-economy estimates, but expect highway numbers of at least 40 mpg (5.9 L/100 km) in order to compete with the Fiesta and offerings from Asian auto makers.

The Aveo was panned by many critics for middling fuel economy and poor quality and safety performance, but GM hopes to remedy any safety concerns by loading the Sonic with 10 airbags and standard electronic stability control.

GM says engineers from its vaunted Chevy Corvette sports car program lent their expertise to the Sonic’s ride and handling, striving for “confident, fun-to-drive” characteristics balanced for the diverse driving conditions of North America.

The car receives a McPherson-style suspension up front and a semi-independent rear suspension. The Sonic’s body structure will rank as one of the stiffest in the segment, GM says. Four-wheel antilock brakes are optional.

The Sonic’s interior features a motorcycle-inspired design, with an instrument panel housing a large analog tachometer alongside a digital speedometer. Buyers also can choose from a pair of colors, dark titanium and brick, for the middle of the IP.

Automatic transmission shift knobs feature what GM calls a “cobra-head” design, while manual transmissions get a chrome-topped stick. Tubular air vents protrude from the dash next to the doors.

The Sonic’s dimensions are generally larger than its predecessor and cargo volume improves, as well.

GM goes for a performance-oriented exterior design, trying to retain much of the styling from the Aveo RS revealed last year in Detroit. Wheels are pushed to the corners, its fenders are flared and round headlamps again suggest a motorcycle.

In a unique styling move, the rear door handles on the 5-door model are integrated into the C-pillar, creating an unbroken, coupe-like look.

Wheel and tire sizes range from a 15-in. steel variety to optional 17-in. alloy type.

GM is switching the name of the car to Sonic from Aveo, Perry says, because it is an all-new vehicle that is sportier and more youthful than its predecessor. Chevy officials also have admitted customers had difficulty pronouncing Aveo.

Outside of North America, the car will continue as the Aveo.

The Orion plant will build the Sonic for the U.S. and Canada only, while Bupyong, South Korea, and a GM facility in China will build the car for 48 other markets.

jamend@wardsauto.com