DETROIT – The Nissan Versa is one of the bigger subcompacts around, but a redone hatchback version might have been downsized if one side had prevailed in an internal debate.

So says Al Castignetti, Nissan North America’s vice president and general manager, after introducing the ’14 Nissan Note at the North American International Auto Show here.

“There was a big debate within the company,” he says of the model’s product development. “The issue was whether to keep the Versa DNA offering more space, or do we make the car smaller to squeeze out better fuel economy. We ended up going with the more-space DNA.”

But Castignetti quickly adds the 5-seater is no gas-guzzler. It is expected to get up to 40 mpg (5.9 L/100 km) in highway driving, 31 mpg (7.6 L/100 km) in the city and 35 mpg (6.7 L/100 km) combined.

The second-generation hatchback, now with its own Note name, is powered by a 109-hp 1.6L 4-cyl. engine. A continuously variable transmission is available as an option.

The car’s 115-cubic ft. (3.3-cubic m) of interior volume includes “best-in-class” cargo space, Castignetti says.

Going on sale in June, the hatchback is a companion to a sedan redone in 2012. This is the sixth year the Japanese auto maker has sold the subcompact in the U.S. Versa entered the market, as did competitors Toyota Yaris and Honda Fit, when U.S. fuel prices surged to unprecedented levels.

The first-generation Versa was a “practical buy,” Castignetti says. “It was utilitarian and not much in the way of attractive styling.”

The new car is redesigned and priced (starting at $13,990) to attract young buyers, he says. Demographically, “the old Versa was all over the place. It had some of the youngest and oldest buyers. We expect this one to appeal more to young buyers.”

The NissanConnect infotainment system is offered as an option because “youth wants connectivity,” Castignetti says.

Also available is a first-in-segment safety system that uses four small wide-angle cameras to provide a 360-degree navigation-screen view of surroundings. The system is designed to help drivers maneuver in tight spots where visibility becomes an issue.

“Innovation and peace of mind should not be the exclusive territory of higher-priced vehicles,” Castignetti says.

sfinlay@wardsauto.com