Hyundai offers a little bigger crossover with its Veracruz

First Look

The 2007 Hyundai Veracruz, introduced earlier this year at the North American International Auto Show in Detroit, is now in dealer showrooms.

QUICK TAKE

2007 Hyundai Veracruz SE Base price: $28,005 Price as tested: $33,170 Drivetrain: Front engine, front drive Engine: 3.8-liter V-6 Horsepower: 260 MPG: 18 city, 25 highway Curb weight: 4,266 pounds Built: Ulsan, South Korea

It’s a bigger crossover than the automaker’s Santa Fe, with a larger 3.8-liter V-6 engine.

The Veracruz, at 15.9 feet long, is 6.5 inches longer than the Santa Fe. It’s also an inch taller and 2.2 inches wider.

The Veracruz comes in three trim levels: The entry-level GLS, the mid-range SE and the luxury Limited. All-wheel-drive is available in all three trim levels.

I took a front-drive SE for a quick drive. Its ride and handling compare to other high-end mid-size crossover vehicles.

The 260-horse engine gives it good acceleration, and the six-speed automatic gets the most from that available power. The Veracruz is available with Hyundai’s Shifttronic manual control, which lets the driver manually shift the transmission up or down one gear, within limits.

Upgrades on the SE include 18-inch wheels, leather-wrapped steering wheel, automatic headlights and a center console that can be cooled.

The model I drove had the optional leather interior, part of a package that added $3,350 to the sticker. The seats are comfortable, and the high seating position gives a good view of the road. The seats are heated – a nice feature to add with leather seats in Michigan. The package also includes a backup warning system.

The Veracruz seats seven in three rows, and the second row is divided. The seat back on each side can be folded, or with a one-hand control, the seat back flips forward and the whole seat slides forward to allow access to the third-row seats.

XM Radio is standard on all Veracruz models, along with rear-seat climate controls, electronic stability control and traction control systems.

One nifty feature is a mood light – a soft, blue-toned light placed between the interior lights in front of the sunroof. Just the thing when you need a little light, but don’t want to blast your night vision with one those bright white lights.

The Veracruz is made in South Korea; 84 percent of the parts are from Korea, 6 percent from the U.S. and Canada, with transmission parts from Japan.

THE FLINT JOURNAL FIRST EDITION
Sunday, April 01, 2007
By James M. Miller

Hyundai’s Mission Possible: Beat the Luxury Brands

LA JOLLA, Calif. The event was billed as a new- product introduction, but it turned out to be a soul-searching session. Hyundai, which entered the United States in 1986 as a corporate infant, is growing up. And growing up isn’t easy.

he early years for Hyundai Motor America were downright painful, with the company made the butt of numerous jokes. The reason was the abysmal quality of Hyundai’s first U.S. offering, the subcompact Hyundai Excel. One joke, from late-night talk show host David Letterman, went like this: Want to frighten astronauts in space? Place a Hyundai logo on the spacecraft’s control panel.

Automotive journalists were equally merciless. There was the standard auto writer’s quip: “Hey,” one journalist asked another, “did you know that the Excel has a fully independent suspension system?” The straight man shook his head. “Well, it does,” said the joker. “The front end goes one way, the rear end goes another.”

Steve Wilhite, chief operating officer of Hyundai Motor America, who last week was here for the introduction of the 2007 Hyundai Veracruz crossover utility vehicle, suppressed a grin at the retelling of those barbs.

“Yeah,” Wilhite said in an interview, “that was a rough start.”

But that was then. This is now.

Hyundai Motor America is part of the Hyundai Kia Automotive Group, the largest car company in South Korea. With combined global sales of 3.7 million vehicles in 2005, a number it is likely to have matched or slightly surpassed when all of the figures are in for 2006, Hyundai Kia Automotive is now the sixth-largest car company in the world, ahead of Japanese rivals Nissan and Honda.

From 2001 to 2005 in the United States, as Hyundai’s reputation for product quality increased, aided by a 10-year/100,000-mile warranty on Hyundai engines and transmissions, Hyundai Motor America’s sales rose an average of 14 percent annually.

But that hot sales pace cooled considerably in 2006. In the United States, for example, Hyundai sold 455,520 vehicles last year, a scant 0.1 percent more than the 455,012 it sold in America in 2005.

That slowdown came partly for reasons completely out of Hyundai Motor America’s control. Chung Mong Koo, the chairman of parent Hyundai, was convicted in February of embezzling the U.S. equivalent of $73.8 million from the company. He was sentenced to three years in jail, but is now free on appeal.

Chung’s legal problems have cast a pall over the company, including its U.S. operations. All major Hyundai decisions, including those governing Hyundai Motor America, run through Chung. When he was arrested last year, the company delayed decisions on several new plants and other key product development strategies.

No Hyundai official here, of course, would comment on Chung’s case or its impact on U.S. operations. Instead, Wilhite and his assistants preferred concentrating on Hyundai’s U.S.-generated problems as it looks for future growth.

“It is not that we don’t know who we are,” said Wilhite. “The problem is that not many people outside of the company know who we are. We haven’t done a good job of telling our story.”

Wilhite said most people in the United States see Hyundai as a small South Korean company dedicated to making small, inexpensive cars. “We’re seen as a ‘value’ car company,” said Wilhite, using the auto industry’s favorite euphemism for “cheap.”

“Value” will remain a “critical part” of Hyundai’s automotive mission, said John Krafcik, Hyundai Motor America’s vice president for product development and product planning. “But we also need to be represented in the upscale segments” of the U.S. automotive market, Krafcik said.

How can Hyundai go upscale without chasing away “value” customers and without being labeled a luxury “wannabe”?

Wilhite and his team are crafting an audacious, exceedingly risky plan.

Bolstered by an incredible No. 3 ranking on J.D. Power and Associates’ overall product quality list, putting Hyundai just behind Porsche and Lexus, Hyundai is now implementing a strategy of building better passenger vehicles than any of its European or Asian rivals and selling them at substantially lower prices.

Hyundai also will challenge the German myth of engineering superiority, mostly by developing and touting “better” engines, transmissions and safety features, such as electronic stability control, a crash-avoidance device currently installed in 73 percent of all Hyundai vehicles sold in the United States.

But taking on the Europeans and the Japanese, and a resurgent General Motors in America, is a very, very tall order. Getting American consumers to believe that the once-meek Hyundai brand can trump that crowd is complicated by Hyundai’s need to avoid any appearance of arrogance, or of indifference to its original budget-minded customer base.

And another problem: Hyundai has 755 dealers in the United States, many of whom have grown up selling “value” and dealing with subprime-credit customers. Getting those dealers on board in the race for upscale clients could prove a daunting task. Some might refuse to cooperate, which means Hyundai will have to move to disenfranchise recalcitrant dealerships — not an easy task for any car company.

But Hyundai indicated here that it is ready to take on its supposedly better-heeled rivals in a one-on-one quality contest. In an event that once would have been viewed as an act of corporate suicide, the company invited a group of international journalists here to do a head-to-head comparison of the new Hyundai Veracruz against the renowned Lexus RX350 mid-size crossover sport utility, which costs about $11,000 more.

I will give full details of the Veracruz-RX50 drive-off in a forthcoming On Wheels review. But here is an initial reading: After a day-long drive of both vehicles over many twisty California roads, most of us left the event wondering why any consumer would pay more for the Lexus RX350.

Score one for Hyundai in its mission impossible.

By Warren Brown The Washington Post
Sunday, April 1, 2007