A rotary electric machine includes a stator; and a rotor including an iron core, which has a tubular connecting portion surrounding a shaft and 10 magnetic pole portions integrally formed with the connecting portion corresponding to a pole number, and a plurality of permanent magnets arranged between the magnetic pole portions. The iron core includes axially-penetrated magnet accommodating air gaps formed between the magnetic pole portions at the radial outer side of the connecting portion, and the permanent magnets are installed in the respective magnet accommodating air gaps such that a radial outer surface of each of the permanent magnets makes close contact with an inner surface of each of the magnet accommodating air gaps and such that a gap exists between a radial inner surface of each of the permanent magnets and the connecting portion.