The Price Is Right

I'm in the Rio, which bills itself as exotic, steamy and a place for high-energy, 24-hour fun.

Wait a minute. I am fantasizing about the glitzy Rio Hotel in Las Vegas, while driving the subcompact Kia Rio, the lowest-price new car in the U.S.

OK, it's not glitzy, exotic or high energy. But for the money, the Rio is a well-mannered, well-built car that comes with a 10-year/100,000 mile (160,000 km) powertrain warranty and six airbags.

And yes, it is fun to drive, although you won't set speed records in the all-new '06 Rio sedan and Rio5 5-door wagon.

There are sexier cars and vehicle segments, but with annual sales of 2-million units, the small-car segment is important. Its subcompact sub-segment accounts for 200,000 units in annual sales.

The overall segment has been flat, but subcompact sales are expected to grow 27% by 2007, as competition intensifies and fuel prices increase. That is why the Rio, which bowed in 2000, is key for Kia, even though it is as entry-level as it gets.

The base 4-door sedan (which includes manually operated windows and side mirrors) starts at $10,570. That is a $400 increase over the '05 model, but Kia executives say buyers are getting much more car for the money.

Moving on up, a Rio LX model starts at $12,445 and the Rio5 SX begins at $13,500. Competitors include the Toyota Corolla, Honda Civic, Chevrolet Cobalt and Scion xA. Kia expects to sell more than 30,000 Rios in the U.S. It could sell more.

“We're requesting as many as we can get, but we are capacity constrained,” says KMA President and CEO Peter Butterfield. “Globally, the demand for small cars exceeds our capacity.”

The new vehicle is wider and roomier, with 92.2 cubic feet (28.1 cm) of occupant space, largest in the subcompact class.

Focus group participants describe the exterior — featuring black body side moldings, an aggressively styled mesh grille and wedge-shaped sides — as youthful and sporty looking, the company says.

The '06 version features more engine power, producing 110 hp at 6,000 rpm and 107 lb.-ft. (145 Nm) of torque at 4,500 rpm. The suspension is tighter than the previous Rio. Aiding crisp handling are a front stabilizer bar, rack-and-pinion steering and engine-speed-sensitive power assist.

“It is tuned for North American roads, climates and weather conditions,” says Gordon Dickie, KMA's director of product quality. “That's a major shift.” The tighter suspension is apparent on the LX, driving along twisty roads north of Seattle. The ride is confidently firm without being uncomfortably hard.

The 1.6L DOHC 4-cyl. is not overwhelming, but is capable of decent acceleration, particularly in models with the 5-speed manual transmission. The Rio achieves up to 38 mpg (6.2 L/100km).

Once an insignificant auto maker from South Korea, Kia Motors Corp. has been expanding its market share and lineup since entering the U.S. market 11 years ago. It is now the nation's fifth largest automotive importer and sold 270,055 units last year with a 9-vehicle lineup.

Butterfield predicts that in another four years, Kia's lineup will resemble Nissan Motor Co. Ltd.'s.

He says one of the auto maker's greatest improvements has been in quality, not only when it comes to its vehicles, but its U.S. dealership network, as well.

Four years ago, there were 40 exclusive retailers doing 20% of Kia's business. Now, of 650 stores, 400 are Kia-exclusive, representing 75% of retail sales.

'06 Kia Rio

Vehicle type: Front-engine, front-wheel drive, 5-passenger 4-door sedan

Engine: 1.6L (1,599 cc) DOHC I-4, iron block/aluminum heads

Power (SAE net): 110 hp @ 6,000 rpm

Torque: 107 lb.-ft. (145 Nm) @ 4,500 rpm

Compression ratio: 10:1

Bore × stroke (mm): 76.5 × 87

Transmission: 5-speed manual

Wheelbase: 98.4 ins. (250 cm)

Overall length: 166.9 ins. (424 cm)

Overall width: 66.7 ins. (169 cm)

Overall height: 57.9 ins. (147 cm)

Curb weight: 2,365 lbs. (1,073 kg)

EPA fuel economy, city/highway (mpg): 32/35

Market competition: Chevrolet Aveo; Hyundai Accent; Toyota Yaris