HOLDEN'S fifth-generation Barina will rock the baby-car class with $12,990 pricing.

This opener is inclusive of air-conditioning, dual front airbags, MP3/CD audio, remote central locking, five head restraints and lap/sash seatbelts, electric mirrors and 15-inch wheels.

On sale from December 1, the Barina is longer, wider and taller than the almost five-year old XC model it replaces to better accommodate heads, shoulders, hips and legs.

Dubbed the TK, the latest Barina will be sourced from General Motors Daewoo Auto & Technology (GM DAT) in South Korea, which Holden currently holds a 48.2 per cent stake in.

It hopes to snare sales from the popular Toyota Echo and upcoming Yaris, facelifted Hyundai Getz and new-generation Accent and Kia Rio and hot-selling Suzuki Swift in the lower-end of the light-car segment.

The new Barina will arrive in a single-specification model available in three and five-door hatchback and four-door sedan guises.

The latter, to debut in February 2006, is a variation of the vehicle General Motors unveiled at the Shanghai motor show in May as the Chevrolet Aveo. It's also a first for the Barina nameplate.

All are based on the Daewoo T200 Kalos - available locally in sedan and five-door hatchback shape from April 2003 to December last year.

Externally the grille, tail-lights and wheel trims are new on the hatchback, while the cabin trim has also been freshened. The styling is the work of ItalDesign's Giugiaro, based in Italy.

However the Barina sedan has been significantly redesigned from the old Kalos sedan, making it the first model to be developed at GM DAT. GM bought the ailing Daewoo in 2002.

Some drivetrain components have also been modified or changed.

Gone is the Kalos' 62kW 1.5-litre single-cam Family One four-cylinder engine for a larger 1.6-litre twin-cam 16-valve variation producing 77kW of power at 6000rpm and 145Nm of torque at 3000rpm.

Two gearbox choices are available: a five-speed manual or four-speed automatic, with the latter offering a "Hold" function for manual selection of the three lower gears.

And even though the 1598cc engine can trace its roots to the 1970s, it is now Euro IV emissions compliant and uses 6.9 litres of fuel per 100km in the ADR 81/01 combined average cycle or 7.8L/100km as an automatic.

Meanwhile, Holden's engineers have honed the chassis over 40,000km of rural and urban road testing to make it more suitable for Australian conditions. This is on top of the 2,032,000km the T200 received by GM DAT.

Holden's aim was to implement "a tighter sports car feel with good control over high frequency corrugations, balanced body control, an overall quality feel with good impact and noise isolation" in the T200 while "more dynamic and precise feel, straight line and cornering stability on all road types and conditions with balanced grip" were the handling targets.

Working with the Kalos' MacPherson struts and coils front/torsion beam rear, they implemented new gas pressure dampers, a thicker front anti-roll bar and revised springs for greater body control and more compliant ride characteristics than before.

The steering remains as a power-assisted rack and pinion steering set-up, while the 236mm front ventilated disc brakes and the 200mm rear drum brakes are now available with an optional anti-lock brake device.

This forms part of a 15-inch alloy wheel package priced at $1190. Metallic paint adds $250.

The radio's AM/FM reception has also been improved for local consumption, among other things.

Holden says both the TK Barina and the larger JF Viva, also from Daewoo (ex-Lacetti/Nubira MK2), have more Australian influence than any other car in their segments.

GM Holden Chairman Denny Mooney doesn't believe the Barina's sharp pricing will spark a price war in the lower light-car segment.

"Some (rivals) have been selling for a little more and offering free registration and the like, so I don't think (that's) going to happen," he said.

From 1997 to 1999 Hyundai, Toyota and Ford fought a bloody cut-price discount war that saw the Excel, Starlet and Festiva selling for well-below $13,000 drive-away. Hyundai is still trying to escape its brand-undermining stack-'em-high/sell-'em-cheap image.

Nevertheless, Holden's marketing manager for passenger cars, Alan Blazevic, says the new Barina's pricing will "set the market onto its ear like never before".

At that price Holden says the TK is competing against used cars as well.

The last time a new Holden dropped below the $13,000 make was in August 1992, when it released the $12,301 MH Barina three-door.

Holden says the price of a 1990 Barina equipped to 2006 TK Barina levels would have cost $25,000.

Holden chose to source the XC Barina replacement from South Korea because that's how it could ensure costs that be contained. After all, the majority of light-car sales volume is in the sub-$15,000 segment.

All up, the whole segment should account for 100,000 sales in 2005. And together with the small-car class, they make up half of all passenger car sales in Australia.

The XC Barina snared a nine per cent share (sales have risen 47 per cent this year alone), yet Holden expects the TK to grow that in 2006: 14,000-15,000 sales is the goal.

The demographic is expected to be non-loyal-to-any-brand, first-timer and female buyers attracted to the high spec levels.

Holden also envisages Empty Nesters and 45-year-old-plus drivers who trust the brand and are comforted by the company's extensive dealer presence.

According to the company, the Barina nameplate has almost 100 per cent consumer recognition, which is on par with the Commodore.

"It has played a vital role in bringing new buyers to Holden," says Mr Blazevic, "with 68 per cent new to the brand".

DAT and South Korea mark the third company and country to supply Holden with its baby car entrant over 21 years.

The 1985 MB original and its MF replacement four years later came courtesy of Suzuki Japan's SA and SF Swift, while the troubled 1994 SB and acclaimed 2001 XC were from made by Opel in Spain.