Competing in the decidedly non-glamorous world of the entry-level subcompact, the 2007 Kia Rio isn't the penalty box one might first assume. Although the first-generation Rio had little in its favor other than a long warranty, last year's rebirth of that model produced a car miles ahead of its forebear in terms of performance, driving dynamics, comfort and cabin refinement. With the new Rio, Kia's engineers and designers produced a small car that's pleasant to drive as well as loaded with features, especially those of the safety ilk.

For 2007, the Kia Rio family grows with the addition of the Rio SX four-door sedan. As with the Rio5 SX five-door (a four-door hatchback), the SX sedan features foglights, 15-inch alloy wheels, a rear spoiler, metallic cabin accents, metal pedals and a black and red cabin theme. That means the Rio sedan comes in three trims — base, LX and SX — while the Rio5 comes only in the SX version. Most buyers will probably go with the LX sedan, as it's not a stripper like the base sedan and, at around $13,000, comes with essentials such as A/C, a CD player and a split/folding rear seat. In terms of style, the Rio5 with its European-flavored looks has it hands down over the more mainstream sedan and offers the additional cargo-carrying versatility of its roomy hatchback body. Regardless of which Rio you choose, the car comes with Kia's 10-year/100,000-mile powertrain warranty.

Last year, the Rio was one of our top picks in the $11,000-$15,000 budget ride segment. But this year brings a couple of strong competitors in the form of the Honda Fit and Nissan Versa. The Fit is impressive in its materials, space efficiency and on-road demeanor, while the Versa promises strong performance and a roomy rear seat. If one is looking to keep spending at the lower end of the spectrum, the 2007 Kia Rio sedan is a solid contender against the likes of its platform mate, the Hyundai Accent, and the Chevy Aveo. Look toward the higher end, however, and the Fit and Versa loom as better choices.

The 2007 Kia Rio subcompact four-door sedan comes in base, LX and SX trim levels, while the five-door Rio5 hatchback comes only in the SX trim. The base sedan is a stripper in most respects (manual steering, no air-conditioning and skinny 175/70R14 tires) but decently equipped in others (attractive cabin materials, driver-seat height adjustment, a tachometer and front-seat side airbags). Step up to the LX to get popular features such as air-conditioning, a CD player, power steering, a 60/40-split folding rear seat, a tilt steering wheel and meatier 185/65R14 tires. The sporty SX versions add foglights, 15-inch alloy wheels, a rear spoiler, metallic interior trim, metal pedals, leather-wrapped steering wheel and a black-with-red-accents cabin theme. Options include the Power Package (which adds full power features, keyless entry and tweeter speakers) and 16-inch alloy wheels for the SX.

A 1.6-liter inline-4 with 110 horsepower and 107 pound-feet of torque powers every 2007 Kia Rio. All trims come standard with a five-speed manual transmission, while a four-speed automatic is optional on all but the base sedan. Although the Rio is more powerful than most of its competitors, its acceleration with the automatic is slightly subpar. A Rio5 SX we tested took 11.5 seconds to run to 60 mph. However, the automatic does provide swift, well-timed shifts. The manual-shift Rio is more sprightly and fun to drive, as one would expect. Either way, the engine gets noisy under full throttle but cruises quietly once up to freeway speeds. Fuel mileage ratings, at 32 mpg city/35 highway with the manual and 29/38 with the automatic, are above average for this class of vehicle.

The 2007 Kia Rio comes standard with front-seat side airbags, full-length side curtain airbags and three-point belts in all seating positions. The LX and SX trims also come with adjustable rear headrests. Antilock disc brakes are optional on those higher trim levels as well. In NHTSA frontal-impact crash testing, the Rio scored four stars (out of five) for driver protection and five stars for passenger protection. In the side-impact test, the Rio earned four stars for front-occupant protection and three stars for the rear.

The 1.6-liter provides decent low-end pull and the manual-transmission version offers enough thrust to merge into highway traffic with ease, although the engine gets noisy at higher rpm. Shifting the manual gearbox is enjoyable, thanks to the precise gates and smooth clutch. The automatic isn't as peppy, though its gearchanges are smooth and relatively quick. The Rio's ride is smooth and stable, and even at 75 mph, the cabin is hushed. The suspension isn't as composed over broken pavement as we'd like, though, as large impacts tend to shudder through the cabin. Pushed through corners, the Rio responds with predictable body roll and unexpectedly crisp steering.

The Rio's interior, especially in beige, has an airy feel typically lacking in this price bracket. The materials quality is generally above average, though a few of the plastics aren't up to Honda levels. Seat comfort is very good for most body types, though drivers over 6 feet tall may get fidgety after more than an hour behind the wheel. A fold-down armrest is standard for the driver, but we'd prefer a more traditional center console box that provides this feature for both front occupants along with handy storage space. In back, headroom is a bit tight for 6-footers, but legroom is fully adequate and the tall bench provides good thigh support.