SCOTTSDALE, AZ – In firearms nomenclature, the word "caliber" often is equated with stopping power. But for Chrysler Group, Caliber could mean the start of something big.

The Dodge-brand replacement for the once-cute, now-tired Neon compact sedan is an exhilarating mix of aggressive styling, ultra-cool features and high-tech engineering. And with a bargain-basement starting price of $13,985, the '07 Caliber is aimed squarely at sales success.

Curbside, the Caliber appears cocked and ready, like a newly minted Beretta – the handgun, not the departed Chevy midsizer.

Caliber's bargain-basement starting price: $13,985.

Although small, it looms large with its sculpted fenders and Dodge's trademark crosshair grille. And while the Caliber stands a full 4 ins. (10 cm) taller than the Neon, it is nearly 2 ins. (5 cm) shorter than the Toyota Matrix, a primary competitor.

To disguise its profile, the Caliber features an innovative matte black applique that spans from A-pillar to C-pillar, not unlike the roof treatment Chrysler gives to its Pacifica cross/utility vehicle.

The applique tricks the eye, essentially shaving height from the roof to create a coupe-like illusion of sleekness – one that belies an unspectacular drag coefficient of 0.375.

But this score does little to overshadow the car's performance. The Caliber is the first product to showcase Chrysler's new World Engine, an inline DOHC 4-cyl. architecture engineered in co-operation with Mitsubishi Motors Corp. and Hyundai Motor Co. Ltd. (See related story: Chrysler Details New 4-cyl. Engines )

It features variable valve timing for both the intake and exhaust valves (many engines in this class vary only the intake valves). Available in displacements of 1.8L, 2L and 2.4L, it generates outputs of 148 hp, 158 hp and 172 hp, respectively. The most the Neon's standard 2L SOHC I-4 ever managed is 132 hp.

Maximum torque ranges from 125 lb.-ft (169 Nm) to 165 lb.-ft. (223 Nm).

Chrysler anticipates combined city/highway fuel economy ratings from 24.5 mpg (9.6 L/100 km) to 29.5 mpg (8 L/100 km) – a 5% improvement over the Neon's 2L I-4. And a major contributor of this performance will be Caliber's available continuously variable transmission (CVT) – another first for Chrysler.

To ensure reliability, explains Larry Lyons, vice president-small car operations, the auto maker chose a CVT supplier with a proven track record – JATCO Corp., a major vendor to Nissan Motor Co. Ltd. (See related story: CVTs Hold Key to JATCO's Future )

Chrysler engineers say the Caliber features JATCO's improved, second-generation CVT2 technology and is good for about 8% better fuel economy than a conventional 4-speed automatic. It is the only automatic Caliber offers.

Loaded with four adults, a CVT-equipped SXT model – the mid-level of Caliber's three trims – winds up slowly, but with minimal wail.

Behind the wheel of a top-line R/T, however, Lyons tips Ward's about an entertaining feature hidden in the CVT's calibration.

When equipped with all-wheel-drive – another first for Chrysler's car lineup – the R/T comes standard with an AutoStick-enhanced CVT. AutoStick enables the driver to toggle sequentially through "œvirtual" gears that are not really there, because a CVT has no fixed gearsets.

But setting the console-mounted shifter at "1" and then standing on the throttle will cause the Caliber to automatically cycle through the six "gears," upshifting every time the tach needle hits 6,000 rpm, until you run out of road, or nerve, or both.

Don't expect your local dealer to show you that trick.

On winding blacktop that soars above the desert floor, the Caliber shows credible stiffness. And while its steering wheel could use more girth, it doles out just enough recoil to feel connected.

Bucking a trend in the compact and subcompact segment, the Caliber's power assist is of the conventional hydraulic variety, rather than the electronically assisted steering found on cars such as the Honda Civic and the Chevy Cobalt, among others.

No corner-cutting on the chassis, either. The Caliber's suspension is independent at front and rear – MacPherson struts and coil springs up front, and a multilink/coil spring arrangement at the rear.

Throttle response is, predictably, in direct correlation to which World Engine is under its clamshell hood.

In back-to-back drives, the Caliber is lethargic beside the Mazda3, which is purpose-built for racy handling and acceleration. Expect the 300-hp SRT version, due later this year, to address this shortcoming. (See related story: Caliber Becomes Another Notch in Chrysler’s SRT Gun )

But the Caliber is quicker than the Matrix. And the Cobalt, while satisfying, purportedly is not a direct competitor because it is not a hatchback.

In a U.S. market that historically is wary of 2-box designs, Chrysler is confidently rolling the dice with the Caliber because executives believe the hatchback stigma is dying. (See related story: Chrysler Says Caliber Breaks New Ground in Hatchbacks )

The Caliber's body style is, in fact, its greatest strength. It is, arguably, the most functional car in its class, with interior innovations such as:

  • Chill Zone, a beverage cooler integrated with the glovebox that is standard equipment on the SXT and R/T models.
  • A flashlight that stays charged, courtesy of a cradle in the headliner.
  • A stylish flip-up center console, capable of holding personal electronic gadgets from slim iPods to bulky Treo phones.Â

One interior innovation even enhances the vehicle's exterior. MusicGate is a speaker system that can be turned outward when the Caliber's tailgate is open. (See related story: Sound Strategy Part of Dodge Caliber Launch )

Further evidence of Chrysler's attention to detail is found behind the front seats, which are carved out to maximize legroom for rear-seat passengers. And sunroof operation eliminates the typical tilt-and-slide fumbling, with a toggle for sliding and a button for tilting.

Mitigating these positives, however, is a disturbing blind spot created by the Caliber's muscular C-pillar and the inexcusable absence of a headrest for the rear-center passenger.

European-market Calibers will have five headrests. And other auto makers selling here manage to overcome the resulting visibility challenges.

All Calibers – including those Chrysler plans to export – are built at the former home of the Neon in Belvidere, IL.