When Hyundai announced pricing of its all-new seven-passenger Veracruz -- starting at just $26,995 -- Toyota no doubt exhaled an irritated sigh, especially considering its seven-seat 2007 Highlander, which offers less horsepower and standard equipment, costs nearly $500 more. And Honda? Probably feeling a bit squirmy, too--its Pilot, equipped with fewer horses and goodies, runs almost $700 extra.

More for less is a persuasive formula for Hyundai. Yet, it hasn't garnered many comparison-test victories in this magazine. Hyundais often come close, but while high on value and warranty, they have tended to register a notch lower in categories such as handling and refinement. That said, with each new model the gap is shrinking.

While we're not ready to declare the Veracruz a class winner, it certainly offers the credentials and seemingly the dynamics to be that vehicle.

The Veracruz does craft a compelling argument as an easy-on-the-pocket Lexus RX 350. For roughly $11,000 less, the Hyundai offers more torque (257 pound-feet versus 251) and nearly as much horsepower (260 versus 270) from its 3.8-liter Lambda V-6, while providing two additional seats and an extra cog in its tranny, thanks to a new Aisin six-speed manumatic. Styling? It's as fresh and clean as the bod on any Lexus sport/ute, with a front fascia that suggests the RX and a rakish D-pillar like that of a Honda CR-V. Further, the Veracruz's interior is as Lexus as, well, a Lexus, certainly based on the luxuries in our Limited test vehicle.

Dimensionally, the Veracruz, at 190.6 inches long, 76.6 wide, and 68.9 tall, closely copies the Honda Pilot and the upcoming 2008 Highlander, and is a smidge longer than both. Third-row room -- or at least the idea of it -- is paramount in these minivan alternatives and the Veracruz delivers ample space for kids and enough freedom for six-footers on a short jaunt. Moreover, access to the third row is trouble-free, as the second-row cushions and seatbacks move forward for easier ingress and egress. And with the second and third rows folded flat, cargo room is 86.8 cubic feet.

Besides wanting a dozen or so additional pound-feet of torque, steering that was more responsive on-center, and an integrated nav system (Hyundai says this option will be available later in the year), we came away thoroughly impressed with the Veracruz. The model range is extensive, offering three trims -- base $26,995 GLS, midlevel $28,695 SE, and flagship $32,995 Limited -- for a wide breadth of budgets and tastes, with each level available in front- or all-wheel drive, the latter a $1700 premium. The GLS is packed with six airbags, stability control, active front head restraints, rear-seat HVAC controls, heated side-view mirrors, 17-inch alloys, and a six-speaker MP3/XM audio system. The sportier SE level tacks on 18-inch wheels, foglamps, power driver's seat, leather-wrapped steering wheel and shift knob, and cooled front center console. Finally, the Limited adds leather upholstery, heated front seats, dual-zone automatic climate control, sunroof, ultrasonic backup warning system, and an Infinity audio system with subwoofer. Other options include an Entertainment Package composed of a rear-seat DVD system with an eight-inch LCD, and an Ultimate Package, which incorporates a power-adjustable steering wheel and a power tailgate.

Certainly, the Veracruz wants to be a formidable player in the seven-passenger crossover segment and looks to be taking aim at some serious competitors. Maybe every automaker, not just Toyota and Honda, should be nervous.

Click here to see more photos of the 2007 Hyundai Veracruz!

2007 Hyundai veracruz
Base price range $26,995-$34,995
Price as tested $33,795
Layout Front engine, FWD/AWD, 7-pass, 4-door crossover
Engine 3.8L/260-hp/257-lb-ft DOHC 24-valve V-6
Transmission 6-speed auto
Wheelbase, in 110.4
Length x width x height, in 190.6 x 76.6 x 68.9
Curb weight, lb 4450
GVWR, lb 5900
Payload capacity, lb 1450
Max towing capacity, lb 3500
Max cargo capacity, cu ft 86.8
0-60 mph, sec 8.0 (TT est)
EPA fuel econ, city/hwy 17-18/24-25
On sale Currently