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HYUNDAI BOSS FACES CHALLENGE OF UPGRADING CAR’S `CHEAP’ IMAGE

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What's the first thing that pops into your head when someone says Hyundai?

If the word "cheap" comes to mind, that's OK with Hyundai's new U.S. boss Doug Mazza - as long as you mean the sticker price and not the quality of the car.But that's the problem: Most people associate Hyundai with poor quality.

Changing Hyundai's image from a maker of poor quality autos to one that builds stylish, safe, well-built entry-level vehicles has been Mazza's highest priority since he took over the top spot at Hyundai late last year.

And in today's fiercely competitive, consumer-driven world of automobiles, Mazza just may have the toughest job in the entire industry.

It's hard to shed an image of poor quality. When Triumph, MG, Sterling, Peugeot and the other manufacturers lost such a battle, they chose to abandon the U.S. market.

Only Great Britain's Jaguar and, more recently, domestic makers Ford, Chrysler and General Motors have been able to repair their dented reputations and persuade skeptical buyers to give them another chance.

Hyundai is facing the same battle. But it's a battle that at least one automotive analyst thinks Hyundai can win.

"Hyundai needs to get more in line with what customers want and get it to them. Hyundai needs to build a better product in terms of styling, quality and price. The only way to do that is through research," said Rudi C. Loehwing, vice president of client services for The Dohring Co., an automotive market research firm in Glendale, Calif.

He said Hyundai could follow Chrysler's example.

"Chrysler improved its product and servicing at the dealer level and now is having great success," he said.

Several years ago, few would have dreamed Hyundai would one day find itself in such trouble.

In late 1986, Hyundai arrived in the United States with a $4,995 subcompact called the Excel, a car that took the country by storm.

In 1988, Hyundai sales peaked at 264,282. But many of those early buyers found that they had bought a car that wasn't reliable.

Then the demand for subcompact cars shrank when buyers stayed out of the market or chose larger cars and credit became harder to get. And Hyundai's sales have been sinking ever since.

Hyundai has beefed up its lineup in recent years with the addition of a larger sedan, the Sonata; a new compact, the Elantra; and a sporty coupe, the Scoupe. It has also implemented one of the most comprehensive warranty and maintenance packages in the business. Despite these moves, Hyundai delivered just 108,549 new cars in the United States in 1992.

Hyundai's sales to the public for the first half of 1993 are running about the same as last year. The carmaker, however, has boosted its sales numbers by selling to rental-car fleets.

Despite the gloomy numbers, there's no talk at Hyundai of giving up. In fact, Mazza's vision of Hyundai has the Korean automaker bigger than ever.

"The No. 1 task is to close the gap between image and quality, to continue the continuum of quality improvement, then to perfect our image in the current segments we sell in before we expand into new areas. And to look for new opportunities for Hyundai to penetrate the marketplace."

Mazza believes Hyundai's worst days are over. He thinks sales have bottomed out and soon will begin to increase.