SEOUL (Reuters) - Hyundai Motor (005380.KS) will unveil on Tuesday a re-designed Santa Fe, hoping the first makeover of the sport utility vehicle (SUV) in six years will help rectify a sales slowdown at the South Korean automaker, especially in the key U.S. market.
The revamped version of its top-selling SUV in the United States and South Korea is larger and more fuel-efficient than its predecessor, and boasts advanced driver-assist features used in its Genesis premium sedans, a source familiar with the matter told Reuters.
“The new Santa Fe will be a bread and butter model for us this year,” the Hyundai insider told Reuters on condition of anonymity since he is not authorized to speak to the media.
“We have high hopes for the model,” he said.
Hyundai Motor reported last week its worst annual earnings in seven years, battered by its delayed response to the burgeoning SUV market and a diplomatic row with China.
A firmer local currency also adds to the woes of the automaker, as it is eating into its profits repatriated from overseas and hurts the price competitiveness of its exports in the United States and other markets.
Hyundai is expected to take preorders for the new Santa Fe from next week and the vehicle is likely to be launched in South Korea as early as late February, the source said. Pricing details could not be obtained immediately.
“The mission of the Santa Fe is to recover Hyundai’s U.S. market share. It carries a big burden on its shoulder,” said Ko Tae-bong, a senior auto analyst at Hi Investment & Securities. The U.S. sales of the aging Santa Fe slumped 25 percent last year even as U.S. industry SUV and truck sales rose 4 percent.
The model, expected in the U.S. market in the third quarter of this year, will be also “key to recovering the utilisation rate of Hyundai’s factory in Alabama”, Ko said.
Hyundai’s U.S. sales fell 12 percent last year, making it the worst performer among automakers in that market, hit by the conservative design of the Sonata and the Elantra sedans and an absence of a broadbased SUV line-up.
The new Santa Fe is expected to share some design cues with Hyundai’s most-recent SUV model, Kona, with the image of the new Santa Fe released last month showing slimmer headlights which are similar to the ones featured on the smaller Kona.
Hyundai, which has three SUV models - Kona, Tucson and Santa Fe - has said it would diversify its SUV line-up by launching a mini-SUV and a Genesis large SUV.
Reporting by Hyunjoo Jin; Editing by Muralikumar Anantharaman