That’s No Lexus, It’s a Hyundai

Forget the myth. Hyundai Motor is not a tiny South Korean manufacturer of cheap little cars. It is a giant — the largest car company in South Korea and, as a part of the Hyundai Kia Automotive Group, the sixth-largest car company in the world.

It is a threat to anyone making cars, economy or luxury.

It can topple General Motors. It can upset Toyota. It already has bypassed Nissan and Honda in global vehicle sales. It is as determined as any company to rank No. 1 on the world’s automotive stage.

You can be forgiven for being surprised. Until now, Hyundai has done well faking humility — rolling out economy cars, wagons and compact sport-utility vehicles for budget-minded consumers. It will continue to serve that segment. Money is money. But there is more money to be made serving the rich — upper-income professionals who traditionally shop Audi, BMW, Cadillac, Infiniti, Lexus, Lincoln or Mercedes-Benz.

Hyundai wants those upscale dollars and is implementing an audacious, risky strategy to get them. It plans to build better luxury vehicles than any existing competitor and to sell those models at prices below that of any segment rival.

Cheeky? Yes. Possible? Consider the 2007 Hyundai Veracruz Limited crossover utility vehicle, which easily runs against the likes of the excellent Lexus RX350 — for thousands of dollars less.

I recently did a day-long, head-to-head driving comparison of the Veracruz and RX350 in San Diego and environs. There were obvious differences. The Veracruz, available with all-wheel drive or front-wheel drive, has seating for seven people. The RX350, also available with all-wheel drive or front-wheel drive, has space for five. The Veracruz has more standard equipment — including some that is usually optional, such as third-row seating — than the RX350.

In terms of crash-avoidance and impact-mitigation equipment, the Veracruz matches or surpasses all mainstream luxury vehicle manufacturers. For example, electronic stability control, side and head air bags, front-seat active head restraints, rear-seat head restraints, antilock brakes and electronic brake assistance are all standard on the Veracruz.

In design and creature comforts, the Veracruz — especially the fully loaded Limited edition — is an undisputed winner. It has a longer, more elegantly sculpted body than the RX350. Inside and out, it simply looks better. Inside, it also feels better — more spacious, less cramped than the RX350. The leather-covered seats are comfortable. (Thankfully, here, Hyundai jettisoned the notion that all drivers’ seats should fit the body as tightly as those in a race car. The Veracruz’s seats recognize that many of us are older and that our bodies are slightly larger than they were in our youth.) The Veracruz has every onboard automotive gadget imaginable, except one. At the moment, there is no navigation system. Hyundai has taken some heat for that. And the company is likely to respond by offering onboard navigation as an option in the slightly updated 2008 Veracruz. I understand the concept of the customer always being right. However, in this case, I believe that both Hyundai and its customers are wrong.

Go to a good consumer electronics shop. Look at the portable, easily attachable navigation systems. Most of them are more advanced and more accurate, and have more usable features than the best onboard navigation systems. But the portables, which can be updated more quickly than the fixed onboard models, often sell for half the price.

It thus makes as much sense for car companies to continue installing onboard systems as it does for them to install car phones, which have been surpassed in features, functionality and value by hand-held cellphones. Hyundai needs to save the money it’s going to waste installing onboard systems and use it to do something else.

But who am I to talk? Hyundai, as represented by the Veracruz, seems to be doing quite well following its own sense of what’s right and what works.

Consider the matter of engineering. The Veracruz comes with an easy-breathing, 260-horsepower, 3.8-liter V-6. It uses regular unleaded fuel. The engine is linked to a remarkably smooth six-speed automatic transmission. The comparable RX350 comes with a 3.5-liter, 270-horsepower V-6 that requires premium unleaded fuel. That engine is linked to a five-speed automatic transmission. Put another way, the Veracruz is less expensive to operate than the RX350. But it’s every bit as much fun to drive.

Still, the problem for Hyundai remains consumer perception. It has to get consumers into the Veracruz to make them believe. That won’t be easy to do in the luxury vehicle segment. Prestige is important to luxury bias. Fair or not, for the time being, “Lexus” still sounds better than “Hyundai.”

By Warren Brown
Washington Post Staff Writer
Sunday, April 8, 2007

Hyundai’s new 7-passenger Veracruz a sweet deal

Hyundai is positioning its all-new 2007 Veracruz seven-passenger crossover utility vehicle against venerable competition, models such as Honda’s Pilot and Toyota’s Highlander, boasting a better powertrain performance and more safety features, in addition to high-quality craftsmanship and sophisticated styling. Like other manufacturers, Hyundai clearly envisions a still-growing crossover marketplace in the U.S., as the South Korean manufacturer now includes three CUVs in its product portfolio.

On sale now, the new Veracruz is available in either front-wheel-drive or all-wheel-drive configurations. The seven-seater may be optioned at three distinct trim levels. Hardly “entry level” in terms of equipment, base GLS models are outfitted with features such as electronic stability control, anti-lock brakes, 17-inch alloy wheels, air conditioning, a multifunctional steering wheel that tilts and telescopes, power windows/locks/heated mirror with turn signal indicators, remote keyless entry and tire-pressure monitoring. This version is impressively priced at $26,995 as a front driver and $28,695 in AWD format.

That same $28,695 entry fee gets you inside a FWD Veracruz SE model, which adds 18-inch wheels, power driver’s seat adjustment, an auto-dimming rearview mirror, auto-dimming exterior mirrors, front fog lights, roof rack and center storage console with the “Cool Box” feature to the already well-equipped base model. Hyundai Veracruz SE AWD models ring up at $30,395.

Anteing up $32,995 (FWD) or $34,695 (AWD) yields the comprehensive Limited package, which brings leather upholstery, power front passenger seat adjustment, heated front seats, a 315-watt Infinity audio system, power sunroof, power tailgate, automatic temperature control, windshield wiper de-icing, a conversation mirror and reverse warning. Chrome and brushed metal enhancements are also thoughtfully designed throughout.

Veracruz GLS models can be ordered with a $1,950 Premium Package that brings a sunroof, power driver’s seat, front seat heaters, leather wrapped steering wheel/shift knob and reverse warning. At the SE level, this package becomes “Premium and Leather,” commanding $3,350 while adding leather seats and an Infinity audio system, in addition to the GLS’s Premium offering. Additionally, a $1,600 Entertainment Package tacks on rear-seat DVD entertainment, a 115-volt outlet and a conversation mirror (to enable front seat passengers to see rear seat passengers when talking. The Premium/Leather gear is required for the Entertainment Package to be checked.

Finally, Veracruz Limited models get exclusive rights to the $2,950 Ultimate Package, which delivers adjustable pedals, memory settings, a power tilting/telescoping wheel, rain-sensing wipers, proximity key, lighted door scuff plates and the 115-volt outlet and the conversation mirror. Another $250 yields Premium Black/Saddle interior materials.

All models are powered by an all-aluminum 3.8-liter V-6 engine shared with the Azera sedan and rated for 260 horsepower and 257 pound-feet of torque in front of a six-speed automatic transmission. Continuously variable valve timing helps optimize intake valve operation, while the variable intake system enhancing cylinder “breathing” at both low and high engine speeds. Semi-active engine mounts decrease motor vibration and, as Hyundai gleefully proclaims, allows the Veracruz to idle with less noise and vibration than a Lexus RX350. The transmission includes sporty Shiftronic manual control, and fuel economy rates at 18/25 city/highway miles per gallon as a FWD vehicle and 17/24 mpg with the AWD system.

That electronic all-wheel-drive setup includes a lock mode splitting torque 50:50 front to rear.

The unibody chassis, MacPherson front suspension, multilink rear independent suspension, gas-charged dampers, front and rear stabilizer bars, 245/65-series 17-inch tires and rack-and-pinion steering ensure carlike composure and crisp handling over a variety of road conditions. The optional 18-inch wheels maintain the same 245mm width tire, but the aspect ratio drops to 60 (lower profile).

Safety equipment is plentiful, including dual front air bags, driver and front passenger seat-mounted side impact air bags, head curtain air bags protecting all three rows, standard electronic stability control with traction control and adjustable active front head restraints that help reduce whiplash.

Three-point seat belts hold all occupants in place and second- and third-row headrests are adjustable. Solidifying Veracruz’s safety are the five-star safety ratings in both front and side impact collisions awarded by the National Highway Traffic Safety Administration.

By Sue Mead
SPECIAL TO THE WASHINGTON TIMES
April 6, 2007

Click on Hyundai’s Online 2007 Veracruz and Take It for a Spin

NEWPORT BEACH, Calif. & FOUNTAIN VALLEY, Calif.– April 2, 2007 – Hyundai Motor America has introduced a new way for its customers to research and shop with the launch of the Veracruz interactive video player. Available on the Consumer Guides/How Stuff Works website (http://public.jumpstartautomotive.com/content/detroit_autoshow_hyunda i/player.html), the interactive video player incorporates one main and seven sub clickable videos for the viewer to research features and benefits of the all-new 2007 Veracruz SUV.

While watching the main video that highlights general features of the vehicle, the viewer can select a topic of interest and, when prompted, click on the video to explore additional sub videos highlighting Veracruz’s key features, such as the exterior, interior, performance and safety. When done, the viewer exits the sub video and returns to what they were watching in the main video.

Hyundai and Jumpstart Automotive enlisted Vimation to create the Veracruz interactive player utilizing the company’s VIM(R) clickable video technology.

“The Veracruz interactive video player provides a compelling and innovative way for our customers to research the Veracruz,” said Joel Ewanick, vice president of marketing, Hyundai. “All of the vehicle’s relevant information via videos, audio, images and text is aggregated into one player. The viewer can jump to different topics through the videos and they have control of what they want to watch and research.”

David Hemingway, chief executive officer of Vimation, said companies that utilize interactive video have a distinct advantage over their competitors. “Loyalty is the hardest commodity to earn on the internet. The only way to earn it is to give the user a personalized and relevant experience, one where they can lean forward and investigate while benefiting from the emotional aspect of a video presentation.”

Hemingway said Vimation’s technology makes it possible for Hyundai to syndicate the Veracruz player into any website while still keeping the content centrally administered. More than 40 metrics will be measured on a real-time basis, including repeat visitors, which videos are being viewed the most, how long each video is viewed, every time an interactive element is clicked and the location in the country where each viewer is watching.

“We’re always looking for new ways to push video content created specifically for the web,” said Dave Latham, west coast sales manager at Jumpstart Automotive Media. “Hyundai has given us this great opportunity to create some unique content while the Vimation technology helps us take it to the next level.”

About Vimation, Inc.

Vimation, Inc., (www.vimation.com) located in Newport Beach, California, is a video interactive media company that has developed a unique technology for online videos that allows users to interact directly with high quality video while they navigate, browse, and shop online. Vimation’s interactive video solutions are based on Flash technology and do not require website redesign. This technology encourages users to search actively for the information they need, while providing real time data to the marketers, in turn helping to make website content more targeted and appealing.

About Jumpstart Automotive Media, Inc.

Jumpstart Automotive Media, Inc. (www.JumpstartAutomotiveMedia.com) partners with leading web publishers to create the Internet’s largest and highest quality community of car shoppers. Jumpstart’s targeted reach and innovative marketing programs help automotive manufacturers and dealers improve their advertising results and help web publishers achieve a maximum return on their audience. Jumpstart counts every automotive manufacturer and more than one thousand automotive dealers as customers. Key Jumpstart Network partners include NADAguides, Vehix, Consumer Guide Automotive, JD Power Autos, Shopping.com, Google, and Yahoo. Jumpstart has partnered with leading web sites and ad networks for a Behavioral Auto Channel which uses behavioral targeting to track and serve ads to in-market car buyers across one of the web’s largest aggregated distribution bases.

About Hyundai Motor America

Hyundai Motor America, headquartered in Fountain Valley, Calif., is a subsidiary of Hyundai Motor Co. of Korea. Hyundai vehicles are distributed throughout the United States by Hyundai Motor America and are sold and serviced through more than 750 dealerships nationwide.

Hyundai offers a little bigger crossover with its Veracruz

First Look

The 2007 Hyundai Veracruz, introduced earlier this year at the North American International Auto Show in Detroit, is now in dealer showrooms.

It’s a bigger crossover than the automaker’s Santa Fe, with a larger 3.8-liter V-6 engine.

The Veracruz, at 15.9 feet long, is 6.5 inches longer than the Santa Fe. It’s also an inch taller and 2.2 inches wider.

The Veracruz comes in three trim levels: The entry-level GLS, the mid-range SE and the luxury Limited. All-wheel-drive is available in all three trim levels.

I took a front-drive SE for a quick drive. Its ride and handling compare to other high-end mid-size crossover vehicles.

The 260-horse engine gives it good acceleration, and the six-speed automatic gets the most from that available power. The Veracruz is available with Hyundai’s Shifttronic manual control, which lets the driver manually shift the transmission up or down one gear, within limits.

Upgrades on the SE include 18-inch wheels, leather-wrapped steering wheel, automatic headlights and a center console that can be cooled.

The model I drove had the optional leather interior, part of a package that added $3,350 to the sticker. The seats are comfortable, and the high seating position gives a good view of the road. The seats are heated – a nice feature to add with leather seats in Michigan. The package also includes a backup warning system.

The Veracruz seats seven in three rows, and the second row is divided. The seat back on each side can be folded, or with a one-hand control, the seat back flips forward and the whole seat slides forward to allow access to the third-row seats.

XM Radio is standard on all Veracruz models, along with rear-seat climate controls, electronic stability control and traction control systems.

One nifty feature is a mood light – a soft, blue-toned light placed between the interior lights in front of the sunroof. Just the thing when you need a little light, but don’t want to blast your night vision with one those bright white lights.

The Veracruz is made in South Korea; 84 percent of the parts are from Korea, 6 percent from the U.S. and Canada, with transmission parts from Japan.

THE FLINT JOURNAL FIRST EDITION
Sunday, April 01, 2007
By James M. Miller

Hyundai’s Mission Possible: Beat the Luxury Brands

LA JOLLA, Calif. The event was billed as a new- product introduction, but it turned out to be a soul-searching session. Hyundai, which entered the United States in 1986 as a corporate infant, is growing up. And growing up isn’t easy.

he early years for Hyundai Motor America were downright painful, with the company made the butt of numerous jokes. The reason was the abysmal quality of Hyundai’s first U.S. offering, the subcompact Hyundai Excel. One joke, from late-night talk show host David Letterman, went like this: Want to frighten astronauts in space? Place a Hyundai logo on the spacecraft’s control panel.

Automotive journalists were equally merciless. There was the standard auto writer’s quip: “Hey,” one journalist asked another, “did you know that the Excel has a fully independent suspension system?” The straight man shook his head. “Well, it does,” said the joker. “The front end goes one way, the rear end goes another.”

Steve Wilhite, chief operating officer of Hyundai Motor America, who last week was here for the introduction of the 2007 Hyundai Veracruz crossover utility vehicle, suppressed a grin at the retelling of those barbs.

“Yeah,” Wilhite said in an interview, “that was a rough start.”

But that was then. This is now.

Hyundai Motor America is part of the Hyundai Kia Automotive Group, the largest car company in South Korea. With combined global sales of 3.7 million vehicles in 2005, a number it is likely to have matched or slightly surpassed when all of the figures are in for 2006, Hyundai Kia Automotive is now the sixth-largest car company in the world, ahead of Japanese rivals Nissan and Honda.

From 2001 to 2005 in the United States, as Hyundai’s reputation for product quality increased, aided by a 10-year/100,000-mile warranty on Hyundai engines and transmissions, Hyundai Motor America’s sales rose an average of 14 percent annually.

But that hot sales pace cooled considerably in 2006. In the United States, for example, Hyundai sold 455,520 vehicles last year, a scant 0.1 percent more than the 455,012 it sold in America in 2005.

That slowdown came partly for reasons completely out of Hyundai Motor America’s control. Chung Mong Koo, the chairman of parent Hyundai, was convicted in February of embezzling the U.S. equivalent of $73.8 million from the company. He was sentenced to three years in jail, but is now free on appeal.

Chung’s legal problems have cast a pall over the company, including its U.S. operations. All major Hyundai decisions, including those governing Hyundai Motor America, run through Chung. When he was arrested last year, the company delayed decisions on several new plants and other key product development strategies.

No Hyundai official here, of course, would comment on Chung’s case or its impact on U.S. operations. Instead, Wilhite and his assistants preferred concentrating on Hyundai’s U.S.-generated problems as it looks for future growth.

“It is not that we don’t know who we are,” said Wilhite. “The problem is that not many people outside of the company know who we are. We haven’t done a good job of telling our story.”

Wilhite said most people in the United States see Hyundai as a small South Korean company dedicated to making small, inexpensive cars. “We’re seen as a ‘value’ car company,” said Wilhite, using the auto industry’s favorite euphemism for “cheap.”

“Value” will remain a “critical part” of Hyundai’s automotive mission, said John Krafcik, Hyundai Motor America’s vice president for product development and product planning. “But we also need to be represented in the upscale segments” of the U.S. automotive market, Krafcik said.

How can Hyundai go upscale without chasing away “value” customers and without being labeled a luxury “wannabe”?

Wilhite and his team are crafting an audacious, exceedingly risky plan.

Bolstered by an incredible No. 3 ranking on J.D. Power and Associates’ overall product quality list, putting Hyundai just behind Porsche and Lexus, Hyundai is now implementing a strategy of building better passenger vehicles than any of its European or Asian rivals and selling them at substantially lower prices.

Hyundai also will challenge the German myth of engineering superiority, mostly by developing and touting “better” engines, transmissions and safety features, such as electronic stability control, a crash-avoidance device currently installed in 73 percent of all Hyundai vehicles sold in the United States.

But taking on the Europeans and the Japanese, and a resurgent General Motors in America, is a very, very tall order. Getting American consumers to believe that the once-meek Hyundai brand can trump that crowd is complicated by Hyundai’s need to avoid any appearance of arrogance, or of indifference to its original budget-minded customer base.

And another problem: Hyundai has 755 dealers in the United States, many of whom have grown up selling “value” and dealing with subprime-credit customers. Getting those dealers on board in the race for upscale clients could prove a daunting task. Some might refuse to cooperate, which means Hyundai will have to move to disenfranchise recalcitrant dealerships — not an easy task for any car company.

But Hyundai indicated here that it is ready to take on its supposedly better-heeled rivals in a one-on-one quality contest. In an event that once would have been viewed as an act of corporate suicide, the company invited a group of international journalists here to do a head-to-head comparison of the new Hyundai Veracruz against the renowned Lexus RX350 mid-size crossover sport utility, which costs about $11,000 more.

I will give full details of the Veracruz-RX50 drive-off in a forthcoming On Wheels review. But here is an initial reading: After a day-long drive of both vehicles over many twisty California roads, most of us left the event wondering why any consumer would pay more for the Lexus RX350.

Score one for Hyundai in its mission impossible.

By Warren Brown The Washington Post
Sunday, April 1, 2007

First Drive: 2007 Hyundai Veracruz Limited – Previews

A Lexus-like seven-seat SUV that should continue to convert Hyundai skeptics.

Plop down in the driver’s seat of the Hyundai Veracruz, and you’ll find yourself in the middle of a quiet, comfortable, content-rich revelation. With a smooth, competent powertrain and luxury touches everywhere you look, it’s not hard to convince yourself that you’re behind the wheel of a Lexus. That’s hardly a shock, of course, given that Hyundai chose the Lexus RX350 as the benchmark for the seven-passenger Veracruz, which is now the largest SUV in Hyundai’s lineup.

A smokin’ deal

We tested an upscale front-wheel-drive Limited model, but all-wheel drive is available on any trim level for a $1700 premium. Ours was $33,120, with the only extra a set of floor mats for $125. Those luxury touches we mentioned? Mood lighting, heated leather seats, a six-disc Infinity stereo, a power liftgate, a sunroof, and auto dimming rearview and side mirrors are all standard. Granted, many of those items are optional on lesser trim levels, but even the base Veracruz includes second-row climate controls, satellite radio, six airbags, and defroster-equipped side mirrors for $26,995, $100 less than an entry-level Honda Pilot and $500 or so less than a similarly outfitted Toyota Highlander. (A base Highlander costs some $1500 less than a Veracruz, but doesn’t include a V-6 or third-row seating.) Should you feel particularly self-indulgent, available packages will add anything from a rear-seat DVD entertainment system to an upgraded, 605-watt stereo to power-adjustable pedals to hands-free keyless entry.

Refined and smooth: Hyundai hallmarks?

A 3.8-liter, 24-valve V-6 is the only engine for the Veracruz, no matter which trim level you choose-GLS, SE, or Limited. Its 260 horsepower provides acceleration that we can’t call particularly fast nor ridiculously slow; figure on about eight seconds for the benchmark 0-to-60-mph time. But power delivery is very linear, and there’s a respectable 257 lb-ft of torque. It’s quiet, too. Very little engine noise makes it into the cabin, and at idle, the Veracruz is so quiet and vibration-free that, if you’re like us, you’ll need to double-check that you’ve twisted the key before slipping into gear. Fuel economy ratings are 18 city 25 highway, on par with the Pilot and Highlander. As refined as the V-6 is, the best part of the drivetrain is perhaps the Aisin-sourced six-speed automatic, Hyundai’s first. Upshifts are hiccup-free and quick, and the box operates so seamlessly, you hardly know it’s there. There’s a manumatic shifting feature, although tipping the lever toward the passenger side to activate rather than toward the driver seems backwards.

The MacPherson-strut front and multilink rear suspension delivers a plush, comfortable ride, especially on the freeway, and we found body control to be exemplary. Sure, there’s some lean when you pitch the Veracruz into a corner with any aggression, but it’s taken care of so quickly that you hardly care. This is certainly no bobbing oceanliner, and there’s little of the rear-end wiggle that usually accompanies soft-riding stuff with a high center of gravity. The steering has luxury-grade heft, but unfortunately is as dead as Orson Welles; you’d be better off looking for feedback from a room full of mimes than from this rack. The brakes are nothing special, although at least there’s no dead zone in initial pedal travel-when you call on the brakes, you get brakes.

Rolling in style

The cabin of the Veracruz is beautifully trimmed using top-shelf materials, and the buttons and switchgear are all relatively substantial. Fit and finish is excellent, but we will admit to finding a few ergonomic mistakes. Besides the foot-operated parking brake, which is positioned to rip out chunks of shin at will, the ashtray takes up far too much of the center console and the seats-all seven of them-could use longer bottom cushions. This is not to say, however, that inside a Veracruz isn’t a good place to be. Despite the too-short cushions, the seats are comfy enough for long trips and we really like the iPod hookup, which is neatly located behind a flip-down door on the dash. Hyundai even thoughtfully provides a short 1/8″ to 1/8″ connection cable and a spot to stash it.

Second-row passengers ride on a sliding and reclining 60/40-split bench, and it’s nearly as comfortable as the front row. Getting into and out of the two-person third row is a simple task, with only one hand required to move the middle row out of the way. Average-size folks will be relatively comfortable back there even with the middle seats pushed all the way back; unfortunately you sit so low and the windows are so high that you feel like you’ve fallen into a hole. The cargo area features a shallow, snap-shut bin under the floor, but there’s scant room to be had until you fold the third row. Once those seats are flat, though, the cargo area will hold 40 cubic feet of stuff.

Boring-but it won’t matter

The Veracruz is quite good, and its interior is astonishingly well-appointed, but an unfortunate side effect of Hyundai’s devotion to the Toyota/Lexus screed is that the Veracruz is also unmistakably boring. It’s not as fun to drive as even the Pilot, never mind something more sporting like the Mazda CX-9. So there’s little about this new Hyundai that will attract enthusiasts, but with its low price and loads of standard equipment, the Veracruz shouldn’t fail to find plenty of buyers. And besides, being boring hasn’t really held back a certain goliath from Japan, has it?

BY ERIK JOHNSON, March 2007 Car & Driver