Hyundai Sets Sights on Families With New 3-Row Santa Fe

CORONADO, CA – Hyundai believes this time it has found the right formula to woo families to its showrooms, the auto maker’s top U.S. executive says.

After trying and failing with the Veracruz large cross/utility vehicle, which debuted in 2007 and was discontinued last year, Hyundai now will attempt to lure buyers interested in people-haulers with a 3-row version of its Santa Fe CUV, now arriving at U.S. dealerships.

“In the end, we didn’t have the marketing resources to put the weight behind Veracruz and make it as successful as it deserved to be,” Hyundai Motor America CEO John Krafcik says here during a ’14 Santa Fe media preview.

A lot of advertising dollars would have been necessary to raise Veracruz’s visibility with new-car buyers, he says.

But by using the existing Santa Fe name for the 3-row model, and designating the 2-row version the Santa Fe Sport, Hyundai believes it is well-positioned with its midsize-large CUV.

Like most automotive brands, the bulk of Hyundai’s new cars and light trucks are sold to well-heeled buyers who don’t have children or are empty-nesters.

“The auto industry right now sells cars to people (who) don’t have kids, for the most part,” Krafcik says.

This is especially true of Hyundai, with 50.8% of its sales going to post-family buyers and only 20.9% to purchasers with families, according to Maritz data. That compares with 27.8% of Hondas and 29.9% of Mazdas sold to people with children living at home.

Still, Hyundai is “bullish” on the new Santa Fe 3-row, Krafcik says, citing the model’s recognizable name, attractive pricing, passenger room, fuel efficiency, solid safety ratings and generous warranty terms.

The Santa Fe 3-row begins at $28,350 for a front-wheel-drive, 7-passenger GLS model and hits $37,750 for a 6-passenger Limited grade with all-wheel drive and a technology package.

Hyundai gave the 6-passenger model its highest grade designation because bucket seats are considered more luxurious then bench seats, Krafcik says.

All Santa Fe 3-row models use Hyundai’s 3.3L V-6 engine, making 290 hp and 252 lb.-ft. (342 Nm) of torque in the CUV.

The 2-row Santa Fe Sport is offered with either a 2.4L or 2.0L turbocharged 4-cyl. engine.

Hyundai claims the 3-row GLS and Limited models have price advantages over most competitors, which either don’t provide the same level of standard equipment or charge more for it.

The biggest differences are seen with older competitors, such as the Toyota Highlander and Honda Pilot, although the new ’13 Nissan Pathfinder S grade is $300 more than a Santa Fe GLS, and lacks the Hyundai’s driver-selectable steering system, as well as standard Bluetooth and satellite radio.

The Pathfinder’s pricing gap grows against a Santa Fe Limited. The Pathfinder costs $1,750 more, but lacks such standard features as a telematics system, Hyundai says.

Sales of the 2-row Santa Fe, which debuted late last summer, are outperforming its predecessor.

WardsAuto data shows a 27.0% spike in Santa Fe sales since September, its first full month on the market.

However, total deliveries of just under 40,000 in the 6-month period lag behind such competitors as the Pilot and Ford Explorer, which typically top 100,000 units in a calendar year.

Santa Fe availability remains tight, and the auto maker is working to remedy that, Krafcik says. The 2-row is built at sister brand Kia’s West Point, GA, facility, while the 3-row comes from a Hyundai plant in South Korea.

Santa Fe days’ supply is the lowest among all Hyundai models in the U.S. right now, he says. WardsAuto shows Hyundai had a 31-day supply of the vehicle in stock at the end of February.

A hybrid version of the Santa Fe is a “maybe,” Krafcik tells WardsAuto, which would match offerings such as the Highlander Hybrid and upcoming Nissan Pathfinder Hybrid.

The Santa Fe rides on the same platform as the Sonata sedan, which offers a hybrid option.

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