Hyundai's Hot New Cars

Despite soaring safety ratings, the Korean automaker's sales have suffered and IT hopes new more-refined models will give it a lift

South Korean automaker Hyundai is turning the page on its most recent and highly successful chapter of history in the U.S. and is opening a new one.

This January at the North American International Auto Show in Detroit, Hyundai will unveil a new model, the Veracruz. The upper midsize crossover will be the ninth vehicle for Hyundai. But even before the Detroit Show, Hyundai will have introduced the redesigned Elantra entry-level car and a facelifted Tiburon sports car, which are hitting showrooms this quarter.

That means Hyundai will have completely freshened its entire product line. In fact, as John Krafcik, vice president of product development and strategic planning, pointed out in an interview, the Tucson compact sport utility, before its freshening this fall, was Hyundai’s oldest vehicle, and it was introduced only in 2004 as a completely new model.

"The focus of our most recent product offensive was product replacement,” said Krafcik. Now Hyundai starts the process of refreshing the line all over again, which started in summer with the 2007 Santa Fe and Tucson. But it is also adding new models, as it has done with the Azera flagship sedan, the 2007 Entourage minivan and later the Veracruz.

Hyundai officials say the Veracruz will be larger than Honda Pilot, have more cargo volume than the full-size Mercedes-Benz GL and offer sleek styling, a car-like ride and premium features. It will feature standard equipment that includes the Hyundai Hideaway third-row seat that offers flexibility for up to seven passengers. It will be outfitted with a standard 3.8-liter V6 engine and, Krafcik noted, Hyundai’s first-ever six-speed automatic transmission.

Krafcik said the vehicle is designed to be fuel-efficient and have the interior size and three-row packaging of a Ford Explorer or Honda Pilot. “It’s a unique take on that kind of vehicle,” he said. “It has a unique design inside and out. It is pure Hyundai in the way first Santa Fe had a unique feel. No one could look at the first Santa Fe and say that was derivative of something. It wasn’t.”

Safety features will include available all-wheel drive, standard Electronic Stability Control (ESC), standard side airbags and standard side-curtain airbags for all three rows of passengers.

Indeed, safety is a top priority of Hyundai. It boasts that 73 percent of its estimated sales volume for the 2007 model year will be equipped with standard stability control, a feature recently made mandatory by the U.S. federal government by the 2011 model year.

The Veracruz was going to take the place of a minivan in Hyundai’s line. In fact, Hyundai had dropped plans about a year ago to produce the Entourage, virtually identical to the Sedona minivan from Kia, the sister company of Hyundai. But just after Hyundai made that decision, gas prices skyrocketed, and the company noticed buyers of full-size sport utilities were switching to minivans. Since the development of the Entourage was already done, Hyundai quickly resurrected plans to offer the minivan, which just went on sale.

Longer term, however, Krafcik said Hyundai will focus more on car-based crossovers than minivans to cover the needs though the minivan could stay in production alongside the crossovers; a decision on that has yet to be made.

While Hyundai has been known for delivering value as well as peace of mind with its long warranty, design will be a key differentiator in the future, Krafcik said. “We’ve agreed within the company that design is our No. 1 priority; it’s our No. 1 differentiating opportunity. So, you’ll see increasingly new designs.”

One of those news designs will be unveiled at the auto show in Los Angeles in November. “You’ll see a concept that is our take on a sporty, youthful entry-level car,” hinted Krafcik.

The concept also demonstrates Hyundai is not abandoning the youth market, where it got its start. “A lot of people think Kia is the youthful brand and we’re going upscale after older, wealthier customers (due to vehicles like the uplevel Azera),” said Krafcik. “Nothing could be further from the truth.”

In addition to the upcoming concept in L.A., Hyundai demonstrates its commitment to the youth market, Krafcik pointed out, with the sporty, three-door Accent and this fall’s facelift on the even sportier Tiburon. The Tiburon undergoes a complete makeover in two years at which time it could switch to a rear-wheel-drive platform or could stick to its front-drive configuration, said Krafcik, who added a decision on its layout would be made soon. “No matter what way it goes, the Tiburon will be more performance oriented and appealing with unique Hyundai sheet metal,” he added.

Going forward, Hyundai will continue to focus on safety and quality as well as value and design. Hyundai expects dramatic rises in its long-term durability ratings as it has experienced with quality in the early days of ownership. Krafcik noted that Hyundai’s warranty costs have been cut in half, thanks to quality improvements, even as vehicles covered by Hyundai’s long warranties move into the high mileage category.

Hyundai is gaining public recognition for its accomplishments. It has two vehicles nominated for the prestigious North American Car and Truck of the Year awards. The Elantra is competing in the car category and the Santa Fe in the truck segment. Winners will be announced at the auto show in Detroit.

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