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A new entry-level sedan joined the Lincoln lineup to rave reviews just last fall.

But for 2007, that car gets major changes – including a new name, a new engine, an all-wheel-drive option, and some face-lifting.

The midsize car that debuted last year as the Zephyr is now called the MKZ, and instead of the 221-horsepower, 3.0-liter V-6 engine in last year’s model, the new car comes with a much better 3.5-liter V-6, rated at 263 horsepower.

Changes this drastic on a vehicle after only a year on the market are quite rare, but Ford Motor Co. officials felt that it was important to do something to differentiate the Zephyr more from its siblings, the Ford Fusion and Mercury Milan.

When all three of these sedans were introduced last year, they were quite similar, including the 3.0-liter engine.

But Lincoln buyers expected more in Zephyr – especially under the hood – than Ford and Mercury buyers were getting in their Fusions and Milans, which cost several thousand dollars less.

To justify the nearly $30,000 starting price of the Zephyr vs. the $21,000 beginning price for the V-6 version of the Fusion and $22,000 for the Milan, Ford did dress up the Zephyr a bit.

Standard amenities included leather upholstery, dual-zone automatic climate control and eight-spoke aluminum wheels.

But some at Ford’s Lincoln Mercury division felt that the Zephyr was too close in design and content to the Fusion and especially the Milan, particularly since both the Zephyr and Milan are sold in the same showrooms.

That explains some of the upgrades, and especially the new, more-powerful engine. The name change, though, remains a puzzle.

Officially, Ford says the change is part of a new naming strategy for Lincoln products intended to make them sound more like luxury models. The company introduced a new midsize Lincoln crossover sport utility vehicle this fall called the MKX, which replaced the Ford Explorer-based Lincoln Aviator, and next year will roll out a replacement for the discontinued LS sedan, called the MKS.

Perhaps the fact that the Zephyr had only been on the market for a year made it easier to change the name now.

Ford decided not to change the name of the Lincoln Navigator full-size sport utility, which has been redesigned for 2007, and also comes in a new extended-length version intended to compete against the Chevrolet Suburban-length Cadillac Escalade ESV. The Navigator has been in the lineup for several years, so its name has had time to build some value for Ford.

The Zephyr name, although revived from Lincoln’s past, had little recognition among today’s consumers.

The original 1936 Lincoln Zephyr was based on a concept by Dutch-born designer John Tjaarda, Ford said.

Maybe the name didn’t quite fit the new model because the original Zephyrs were known for their performance. They came with a 110 horsepower flathead V-12 engine. The 1942 Zephyr convertible used in the “Thin Man” movie series in the 1940s, starring William Powell and Myrna Loy as crime fighters Nick and Nora Charles.

The MKZ name has no such cachet, but as nice as the 2007 model is, it might earn some rather quickly.

Pronunciation of the car’s new name has changed since the first announcement of it was made. Earlier this year when Ford said the Zephyr would become the MKZ, the company said the name would be pronounced “Mark-Z.”Likewise, the company said name of the new sport utility, the MKX, would be pronounced “Mark-X,” and the new larger sedan, MKS, would be known as the “Mark-S.”

Sometime before either the MKX or MKZ went into production, however, Ford shifted gears and decided that the names would be pronounced as they appear: “M-K-Z” and “M-K-X.” That was how they were referred to during the recent media preview of the two vehicles at the Biltmore Estate in Asheville, N.C.

Even with the bigger engine and other improvements, the MKZ’s starting price will remain almost identical to last year’s, $29,890, including freight, for the front-wheel-drive model.

The new all-wheel-drive version begins at $31,765, including freight. It is the first all-wheel-drive car for the Lincoln brand, but a necessary move to help the car compete against other sport sedans in this class that offer all-wheel drive, including the Infiniti G35 and Lexus IS.

The car’s revised power is similar to that of some of its competitors, such as midlevel models of the Cadillac CTS, with 255 horsepower; the Lexus ES 350, with 272; and the Acura TL, with 258. But the redesigned Infiniti G35 beats all of the V-6 models, with 306 horsepower.

Ford has high hopes for the MKZ, which is intended to help bring new, younger customers into the Lincoln brand. Almost half of the buyers of the Zephyr have been new to the Lincoln brand, the company said.

The previous model won several honors, including Ward’s Auto World magazine’s 2006 “Best Premium-Car Interior” award, and came in second in its segment in the 2006 J.D. Power Initial Quality Study.

As for the exterior changes for 2007, Ford says the MKZ “presents a refined interpretation of Lincoln’s traditional waterfall grille,” and features “clean lines, new 17-inch machined aluminum wheels, distinctive lighting and chrome accents” that “create a dynamic, uniquely American interpretation of luxury.”

In short, it’s not quite as distinctive as some of its European competitors, but not nearly as bland as some of the Japanese entries in the crowded entry-luxury segment. What it doesn’t have is the gratuitous faux-luxury of earlier Lincoln cars that looked tacky rather than luxurious. This car really does look great, and there’s nothing cheap about it, inside or out.

The new V-6 engine is all-aluminum, has four valves per cylinder, and has variable valve timing, similar to some of the best new engines from Japan. This engine will be used in other Ford vehicles as well, to the point that one in five will eventually come with the engine, the company said.

In the MKZ, it’s connected to a six-speed automatic transmission, which carries over from the Zephyr.

To handle the extra power, the car’s suspension has been re-tuned. e changes are designed to “deliver a more athletic driving experience,” the company said.

The all-wheel drive is designed for all-weather driving, and requires no driver input – it operates fully automatically to send power to any of the four wheels as needed. This is not a feature that is useful only in snowy climates, however; even consumers in Texas will enjoy the sure-footed traction of this system on wet pavement or on loose gravels. Only two models are offered – front or all-wheel drive; there are no other trim levels. Standard features of the MKZ include a wood- and leather-trimmed interior; 17-inch, painted-aluminum, eight-spoke wheels; LED taillights; dual-zone automatic climate control; heated, 10-way power-adjustable driver and front passenger seats with power lumbar and recline; memory feature for the driver’s seat and mirrors; and a new auxiliary input jack for the audio system that allows for easy connection of an iPod or other MP3 player.

Besides all-wheel drive, options include Sirius satellite radio; an uplevel THX audio system with 14 speakers and a six-disc, in-dash CD player compatible with MP3 and text-format CDs; a GPS navigation system with a 6.5-inch screen and the ability to give audible directions in English, Spanish or French; high-intensity-discharge headlights; 17-inch, eight-spoke chrome wheels; premium perforated-leather cooled front seats; a power moon roof; and satin-nickel interior trim instead of wood on the doors, center console and instrument panel.

The MKZ is arriving at Lincoln Mercury dealers now.