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By Julie Halpert | Newsweek Web Exclusive
When Korean automaker Hyundai rolled out the Excel, its first U.S.-bound vehicle, in 1986, it sold for $4,995, roughly $1,500 to $2,000 lower than comparable autos on the road. Lured by its low price and the prospect of topnotch Asian quality, consumers bought 263,610 units during the first year alone. But problems quickly emerged—the cars began to fall apart, with trim and paint peeling off, and cosmetics were not the only issue. "I remember an Excel making a lane change and going up on three wheels," says Jonathan Linkov, editor of Consumer Reports' autos coverage. Hyundai's successful sales storyline was quickly rewritten, and the company became the punch line of the auto industry.
Sound familiar? It should. General Motors and Chrysler are finding themselves similarly derided as they climb out of bankruptcy. But there's nothing funny about the state of both companies. While GM plans to launch 11 new vehicles over the next two and a half years, it's been forced to shed three brands and shutter nearly 2,000 dealers. Chrysler, meanwhile, is saddled with the task of attracting consumers with a lineup that may largely be produced by its new and relatively unfamiliar European partner, Fiat.