As always, the real Hyundai story is about sales, not product. Last year Hyundai sold 375,119 vehicles, yet another increase of nearly fifty percent over the year before. This is quite a change from 1998, when the Korean manufacturer sold just 90,217 cars in the U.S., and dealers were giving back franchises quicker than Hyundai Motor America could hand them out. The turnaround has come thanks to Hyundai's innovative 100,000-mile powertrain warranty, 50,000-mile bumper-to-bumper warranty, and 100,000-mile road side assistance program, which has made the Korean company the choice of those shopping for entry-level vehicles, where durability and reliability are key features.
As far as Hyundai is concerned, the revised 2004 Sante Fe's keynote is the Hyundai-designed and -built DOHC 3.5-liter V-6, which produces 195 hp at 5500 rpm and 219 lb-ft at 3500 rpm and works through a five-speed automatic. The 3.5-liter V-6 replaces the 2.7-liter V-6, which was originally specified because it delivered car-like fuel efficiency in this segment of the SUV market.
As far as we're concerned, the most important new feature of Sante Fe is actually the introduction as optional equipment of Borg-Warner's InterActive Torque Management four-wheel-drive system. Hyundai's chief product planner looked a little surprised when we reminded him that this is the same inexpensive yet incredibly effective system in the Acura MDX and Honda Pilot, which furnishes terrific all-weather mobility without compromising everyday drivability. Other useful improvements to the Sante Fe include front-seat side impact airbags as standard equipment. (There will be no rear-seat side bags or curtain-type head protection until the next-generation Sante Fe.)
This segment of the sport-utility market is dominated by women drivers, and Sante Fe sales are rising dramatically while sales of the Ford Escape, Honda CR-V, Jeep Liberty, Saturn Vue and Toyota RAV4 are declining. The revised Sante Fe 3.5 still drives much the same as before, really. There's a little too much suspension travel that is a little underdamped, which makes this sport-ute feel clumsy at either very high speeds or very low speeds. But the Sante Fe is a good utility wagon around town, which it is meant to be. And it is spectacularly affordable compared to its direct competition, not to mention the Honda Pilot and Toyota Highlander.
Overall, Hyundai seems intent on capturing the kind of "smart buy" people that we've long associated with Honda. It's doing the job by offering product innovation only when the cost comes down to an affordable level (as with the Sante Fe's all-wheel-drive system). This strategy that doesn't bring Hyundai much critical acclaim, because it keeps the company about one generation behind the competition, but it's a brilliant move for cost-conscious consumers.
Hyundai has become a major league car company in this country. And it's going to get even better now that it has invested $30 million in a new design center in Irvine, California, begun construction of a $5 million test track in the California desert, and poured $1 billion into an assembly plant for the next-generation Sonata and Sante Fe in Montgomery, Alabama. Honda and Toyota better watch out.