Daewoo Kalos

When Hyundai arrived in Australia in the mid 1980s, it revolutionized the local car market. Much like when the Japanese first arrived in the 1960s, here was a cheap alternative to buying a used car that offered basic, but new, transport.

After Hyundai established itself with Excel, it wasn't long before the two other Koreans saw the potential in the market here and by the mid-'90s, Daewoo and Kia had joined the fight for the bargain basement buyer.

Massive expansion plans and some dubious operational practices soon saw all three Korean makers running close to bankruptcy and wallowing in massive debt. DaimlerChrysler came to the aid of Hyundai, which had previously swallowed Kia, and finally after years of negotiations, General Motors, with Holden as the major stakeholder, bought Daewoo in 2002.

Now with a Holden-owned local distributor, GM-Daewoo -- as the company is officially branded -- is about to try and re-assert itself on the market with a new range of cars. The first of these is the Kalos, which replaces the Lanos, while the mid-sized Nubira sedan will be replaced with the Lacetti later this year.

Like the Lanos, the Kalos, which apparently means "beauty" in ancient Greek, is available as a sedan and five-door hatch. You are unlikely to confuse the car with its predecessor as, having been penned by Italdesign, it adopts the now familiar tall-body Euro style that so many entry-level hatchbacks are taking on.

The general idea behind this type of body is to provide greater interior space and versatility and in some areas this comes through in the Kalos.

Up front has a decent amount of space but step through the small rear doors and an average-sized adult will find the back seat tight on head and legroom. Get behind the back seat and the boot is tiny -- just 195 litres -- although it can be expanded via the 60/40 split fold rear, and the whole seat base folds forward to provide a bigger, but not flat, floor space.

The storage cubbies are also small, you would be lucky to squeeze a Sydney- or Melbourne-sized street directory into the door bins.

What does impress about the interior, however, is the styling and quality of the fit and finish, which is light years ahead of the Lanos. A mix of textures, colours and materials in the dash and door trims helps break up the usual grey-o-rama found in many cars around this price, and actually makes it feel more upmarket than its $14,990 pricetag would suggest.

It also comes with a decent list of standard equipment that includes air-conditioning, radio/CD player, driver and passenger airbags and power windows for the front and rear. It does however, miss out on power mirrors and more importantly, central locking, which given the target market seems an oversight. When queried about this, Daewoo reckons that this can be fitted by dealers as an aftermarket option, while something like the passenger airbag, which the company says is necessary for it to improve upon the Lanos' poor NCAP record, can't.

Under the bonnet, sits an upgraded version of the Lanos' 1.5-litre four-cylinder engine. Despite the upgrade, this engine is still pretty old-tech and produces maximum figures of 62kW and 128Nm. Stacked up against the competition, these sound more like they should come from a 1.3-litre, but that said, on the road it seems enough to get the little 1000kg Kalos off the mark and maintaining pace with the traffic.

It is also surprisingly refined and quiet and really only makes its presence known when pushed beyond 4500rpm. Not that there is much point in this as the engine does its best work below this so it's probably best to make regular use of the slightly notchy but still easy to use five-speed manual gearshift and keep it spinning between 2000-4000rpm.

On the road, the Kalos provides a comfortable ride over all surfaces with plenty of compliance in the softish suspension. The trade-off for this however, is in the handling with the car exhibiting quite a bit of body roll through corners at anything more than sedate speeds, and being reasonably quick to understeer, especially in the wet. The power-assisted steering is light, with little feel, and the front disc and rear drum brakes do a decent job of pulling the car up.

While handling is obviously not one of the car's strong points, it is not the sort of car that owners would want to push hard, so for easy urban traveling or even highway cruising, the bias on ride comfort is appreciated.

There is no doubt that the Kalos is a massive improvement over the Lanos, and if it is a sign of things to come, then the reborn Daewoo may prove to be a good investment for GM. It is a competent small urban runabout that looks quite good too, and its biggest appeal is still the price.