Based on the ‘Kappa’ petrol engine, the 1.0-litre engine delivers 110PS courtesy of a turbocharger, delivering more power from the small powerplant than the current version.
However, Kia customers will have to wait until June 2012 to try out the engine, when it will debut in its small car range comprising the all-new Picanto and Rio.
The engine has been designed to be smooth and responsive, while delivering 137Nm of torque up to 4,500rpm.
Kia also promises reductions in the weight and efficiency of the engine, resulting in lower running costs for owners.
Fuel economy will be improved by 8.8 per cent compared to the current 1.0-litre petrol engine in the Kappa range, says Kia.
Kia itself will reduce costs because the simpler engine will be cheaper and easier to build, bringing down the cost of production for the engine.
When the engine does appear in Kia cars from 2012, it will come with a chain-driven timing system to deliver low maintenance costs along with a 10 year/ 100,000 miles guaranteed lifespan.
The Kia Picanto will be launched this year and it will be joined by the all new five-door Kia Rio supermini in 2012, when both models will be offered with the frugal Kappa engine.
Both the Kia Picanto and Kia Rio will be on display at the Geneva Motor Show from 3 March alongside the new Kia Kappa engine at the Kia stand.