The 2007 Nissan Versa is the tip of the second wave of products that has brought the Japanese carmaker from near death to profitability.

After Carlos Ghosn took over the reigns of Nissan as COO in 1999, he embarked on one of the greatest turnarounds in automotive history.

Almost by magic, cars like the Murano, Altima and a series of lifestyle trucks like the X-trail and Xterra brought people flocking back into Nissan dealerships and, as a bonus, "discovering" the Infiniti luxury division and vehicles such as the G35 and FX SUVs.

Back in Japan there were even comic books about Ghosn and his crusading efforts to vault Nissan back from the grave.

But funneling resources into new product always means something has to suffer and this included Nissan participation in the subcompact segment while clinging to the compact Sentra that was behind the curve. In fact, Nissan took itself out of the entry car segment more than a decade ago when they dropped the Sentra Classic in 1993.

But times, and gasoline prices, have changed and the entry-level car now accounts for more than half of all sedans purchased in this country. As Nissan officials pointed at the launch of the new Versa, there is plenty of opportunity for makers of subcompacts as Toyota, Honda and Hyundai/Kia are proving.

Versa is based on a joint Nissan/Renault 'B' segment chassis with the Versa version being engineered for North American requirements and statutes.

From the outset, making the interior as large and accommodating as possible was the design mantra.

In describing the 2007 Versa sedan and hatchback, Nissan Canada marketing director Ian Forsyth said, "they are 'entry-level' in their affordability but they make no excuses - zero - in terms of quality, design, performance, safety, technology and, especially, roominess."

What will strike people when they first get in the Versa will be, not just the quality look of the materials, but the feel. The armrests, for instance, are softer than those on a big armchair. Everything from the switches to the covering on the dashboard has a subtle tactile texture to the touch.

Outwardly, the Versa looks like a box, but it has a sports-car-like drag coefficient of 0.31. The wheelbase at 2,600 mm (102.4 inches) is closer to a midsize sedan, but the extremely short front and rear overhangs are what keep it in the entry-level class. Open the hood and you'll see the engine is actually pushed back, part of it fits under the windshield. It shows how hard the engineers worked to maximize packaging.

The payoff comes in the cabin where the driver can sit with her/his seat all the way back and enjoy arms and legs out seating. But, at the same time, the passenger behind her/him will find they still have full legroom with no pinching. Total interior volume is 2,772 litres (94.4 cu ft) in the hatchback version and 2,659 litres (93.9 cu ct) in the sedan. That is larger than some compact crossover SUVS currently on the market. It also adds up to 479 litres (16.9 cu ft) of trunk space in the hatch and 391 litres (13.8 cu ft) in the sedan.

Forsyth said one of the goals was to create a fuel-efficient car that would also be comfortable for four over a long trip. The press launch of the Versa took place outside of Nashville, Tenn., on a series of lovely gently curving roads through a truly lush landscape of green, unfenced pastures and tall trees bursting back to life with the spring sun.

The front seats are bigger and wider to suit the North American's evolution into taller and more robust people. But because the Versa is wider than it looks, front seat occupants won't be butting shoulders.

There is one engine, but three transmissions. A six-speed manual is standard, and I believe, the only one offered in this segment. There is also an optional four-speed automatic and Nissan's new Xtronic CVT (Constantly Variable Transmission). Nissan is in the midst of converting its fleet to the CVT. In theory, the CVT offers improved gas consumption because it can better match fuel requirements to engine needs.

Fuel numbers for the manual are 7.9/6.3L/100 km (36/45 mpg) city/highway; automatic, 8.5/6.2L/100 km (33/46 mpg); and 7.9/6.1L/100 km (36/46 mpg). While these look similar, Forsyth said testing showed the CVT proved better at matching speed and power.

The engine is a new 1.8-litre 16-valve, four-cylinder making 120 hp and 126 lb/ft of torque. It's lusty, but because it is placed so close to the cabin, it can be loud under full throttle.

Normally passing means looking ahead, trying to judge the distance and then taking a deep breath hoping the old four-banger mill will have the grunt to make the pass. The Versa handles this test with aplomb.

Considering its squarish sides, the sightlines are pretty good, but a careful sighting of the mirrors will be required to minimize the blind spot. The use of "soft" and "super soft" trim is a new experience.

The electric power steering has little of the deadness of feel these can impart. Turning is more fluid and weighted without a ratcheting feeling of the steering wheel you can get with electric power steering.

Pricing at this writing has not been set but was estimated to start at about $14,500 for the six-speed manual base 'S' model that includes air-conditioning, power windows and locks and 15-inch wheels. It will top out at around $18,000 for the 'SL Tech' with a Sport package only on the hatchback coming in the last fall. Plans are for the Versa hatch to arrive in Canadian showrooms in July of this year with the sedan not coming until January of next year.