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The industry’s first midsize crossover utility vehicle, the Toyota Highlander, gets a complete makeover for 2008.

Originally launched for 2001, the Highlander was the first midsize SUVs to break from the truck mold, offering consumers a more-refined family hauler that was based on the unibody chassis of a car – in this case, the Toyota Camry.

Since the Highlander’s arrival, crossovers have bloomed, and in model year 2005, they overtook the truck-based models as the best-selling SUVs. Most automakers have at least one, and some (including Toyota) have several in their lineups.

The redesigned Highlander, which goes on sale in July, rides on the same architecture as the recently redesigned Toyota Avalon full-size sedan, which itself is a stretched version of the current Camry midsize sedan.

The result, of course, is that the new Highlander is bigger and roomier than before, with more passenger and cargo space. Toyota says it has grown 3.8 inches longer, 3.3 inches wider and 2.8 inches higher, with a wheelbase that is 2.9 inches longer. Inside, there is 41 more cubic feet of space.

It’s heavier, as well – about 300 pounds.

But to overcome the extra weight, there’s more power.

Under the hood is the same 3.5-liter V-6 engine that is used in the Camry and Avalon, rated at 270 horsepower and 248 foot-pounds of torque. The horsepower is up 55 from that of the previous model’s 3.3-liter V-6.

Gone, though, is the four-cylinder engine from the previous generation, which offered not only better fuel economy than the V-6, but a lower starting price for the Highlander.

Toyota’s theory is that people who want a four-cylinder will buy the smaller RAV4 instead. It was redesigned for 2006, and is now almost the size of the previous Highlander.

Toyota also has pushed the Highlander more upscale – which primarily means more expensive – in response to a “shift in buyer priorities,” said Bob Carter, group vice president and general manager for Toyota’s U.S. marketing and sales operations.

The base price is now $27,300 (plus $685 freight) for the two-wheel-drive entry model, compared with $24,880 for the 2007 four-cylinder model, and $25,940 for the lowest-priced V-6 version.

“This shift in positioning is a product of listening carefully to our customers; and more importantly, to those customers who shopped Highlander, but purchased something else,” he said.

In reality, though, Toyota is merely taking advantage of its lofty market position.

Many consumers consider Toyota products to be worth more than their competitors, and are willing to pay a premium for them.

Toyota is careful, though, to add content to justify the increased prices.

When compared with the entry-level 2007 V-6 seven-passenger model, the 2008 seven-passenger model is just $510 more, the company says. But the top-level model’s price increased nearly $2,000 over 2007.

Although only about 20 percent of Highlander buyers chose the four-cylinder model, the lower-priced version did give consumers more choice.

And with climbing gasoline prices, the mandatory upgrade to a V-6 in the 2008 model might not be all that popular with consumers. The four-cylinder 2007 model is EPA rated at 22 miles per gallon city/28 highway (two-wheel drive).

Ratings for the new V-6 are 18 miles per gallon city/24 highway, compared with 17/23 for the 2007 model, so even with the increased power, fuel economy has been improved. The differences are actually more than they seem, as the new model’s ratings are based on the EPA’s more-realistic fuel-economy rating formula. Using the 2007 standards, the new V-6 would have slightly higher ratings than the 18/24.

All-wheel-drive models for 2008 are rated at 17 mpg city/23 highway.- The four-cylinder could be revived, though, Carter said.

“If we see a demand for a four-cylinder, we’re prepared to address that,” he said. Coming in October is the redesigned Highlander Hybrid, whose EPA ratings are 27 city/25 highway.

This model uses a smaller V-6 engine combined with an electric motor to give the hybrid combined power equal to that of the gasoline-only version. No prices have been announced yet, but the 2007 hybrid version begins at $32,490, which makes it hard to recoup the extra cost at the gas pumps even with fuel at $3 a gallon.

Toyota says the redesigned Highlander adds “significant” standard features, including a new five-speed automatic transmission, electronic power steering, side-curtain air bags for all three rows of seats, a driver’s side knee air bag, larger alloy wheels, and, of course, the bigger engine.

Increased safety was the major goal in the Highlander’s redesign, said Yukihiro OkaneÖ, the executive chief engineer for the vehicle. Besides the additional standard air bags, the new model comes with a more-rigid cabin, a design that allows for better absorption of crash energy, and new active head restraints.

There also is increased protection for pedestrians who might be hit by the Highlander, he said. The vehicle comes with a collapsible hood and fender tops, a softer hood construction, and increased clearance between the hood and the engine.

Also improved were the Highlander’s electronic stability control, brakes and steering, he said. Much of the new model’s added weight came from reinforcements to the cabin for better crash protection, Okane said.

The Highlander’s exterior was significantly redesigned as well, in a move to make it more appealing and less bland.

The result is an improved look, but nothing dramatic. In fact, many consumers will consider it to be still quite bland. That’s really never been a problem for Toyota, however. It has never been known for flashy styling, yet has the top-selling entries in several segments.

The Highlander is aimed at couples, empty-nesters and busy families, Carter said. But Toyota hopes it will attract significantly younger and more-affluent customers than the previous generation, he added.

There are several new convenience features in the Highlander that were inspired, in part, by owners of the previous generation, Carter said.

Among them is a second-row seat that can be instantly converted from a three-person bench to a two-person bucket-seat setup, giving the rearmost passengers a walk-through area.

The middle section of the second row can be stowed into the floor in a compartment under the front console.

Other standard or optional features include a rear glass hatch that opens separately from the entire tailgate, a Smart Key system with pushbutton start, 19-inch alloy wheels (17-inch are standard on base models), several audio system options, a navigation system, and a rear DVD entertainment system.

Three trim levels are offered: base, Sport and Limited. All-wheel drive is optional on all three.

The base model with all-wheel drive lists for $28,750 plus freight. Among standard features are manual air conditioning, power windows/mirrors/door locks with remote, tilt and telescopic steering wheel, AM/FM/compact-disc player with six speakers, and 10 cupholders.

For the midlevel Sport model, prices start at $29,950 for two-wheel drive, and $31,400 for all-wheel drive.

Extra features on this one include an eight-way power driver’s seat and four-way power front passenger seat, 19-inch wheels, dark-silver roof rails, sport-tuned suspension, the rear glass hatch, a chrome exhaust tip, rear spoiler, fog lights, rear backup camera, and sport badging.

Top of the line is the Limited model, priced at $32,700 (2WD) and $34,150 (AWD). This one comes with the Smart Key system, dual-zone automatic climate control, a 10-way power driver’s seat, chrome grille and door handles, fog lights, puddle lights, light-silver roof rails, heated outside mirrors, rear spoiler, the backup camera, woodgrain interior trim, power rear hatch,

The third row seat folds flat into the floor to create a larger cargo area.

Five-passenger models, with no third seat, are available in the base and Sport trim levels.

A separate rear air conditioning system is optional.