All-new Kia Niro 'Hybrid Utility Vehicle' coming

Kia has announced plans to roll out an all-new hybrid compact crossover in the next two years as it aims to improve the average fuel efficiency of its lineup by 25 per cent compared to 2014 levels by 2020.

Dubbed a Hybrid Utility Vehicle, the Niro "will maintain all the practicality and appeal of a compact SUV, while offering greater fuel economy," according to Kia.

"Our new model is designed to offer buyers everything they could want from a compact SUV in terms of practicality and styling, while providing the typically low running costs associated with a dedicated hybrid powertrain," Kia Motors vice-chair and CEO Hyoung-Keun Lee said in a statement. "By encouraging our engineers to take a 'blank canvas' approach, we have tried to develop a car that will appeal to a broader range of consumers.

"The compact SUV market remains one of the fastest-growing segments around the world, and by offering handsome styling, modern appearance, high practicality and extraordinary fuel economy, Kia's new Niro Hybrid Utility Vehicle will be the most appealing and desirable car in its class."

Kia said the main focus of the engineering teams is to deliver class-leading fuel economy in the compact SUV segment.

Unlike some hybrids that are adapted from gas-powered models, the Kia Niro has been conceived as a dedicated hybrid model, with a plug-in hybrid version coming later.

The automaker said it will be powered by a "downsized hybrid powertrain" that combines Kia's 1.6-litre Kappa gasoline direct injection (GDI) engine that makes 104 horsepower and 108 lb.-ft. of torque with a 1.56-kWh lithium-polymer battery pack and a 32-kilowatt electric motor.

Power will be put down through a six-speed dual-clutch transmission.

The Kia Niro is due to be unveiled next year, with production scheduled to start in late 2016.