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Hyundai: Giving Them Something To Talk About

Introducing the '06 Sonata

This is a sedan with a focus on the American market. This is a sedan that ought to make plenty of people sit up and take notice—and we don't just mean people who are in the market for a new car.

Bob Cosmai, president and CEO, Hyundai Motor America (HMA; Fountain Valley, CA), describes it variously as "the most important launch in the company's history," "a big step up for Hyundai," and, echoing the company's advertising slogan, "a Hyundai like you've never seen before." He's talking about the 2006 Sonata. Although the car is available in Korea, and will be available in other parts of the world, as well, it was specifically engineered and designed for the American market. Work was conducted at Hyundai America Technical Center Inc., which is headquartered in Ann Arbor, Michigan, and which has operations in California. What's more, it is also being produced in the U.S., in Hyundai's brand new $1.1-billion assembly plant in Montgomery, Alabama. A goal here is to insert "Hyundai" on the actual or virtual spreadsheets of car buyers where the names "Toyota," "Honda," and "Nissan" are already slotted in. "I want people talking about Hyundai," Cosmai says—but talking about the company in a positive way, not about, say, quality problems.

 

Quality Is Key.

A key concern is to assure that the quality that Hyundai has achieved of late (e.g., the Sonata receiving the '04 J.D. Power and Associates Initial Quality Study award for entry midsize vehicles) is maintained, if not strengthened. Given that the '06 Sonata is (1) a new car, (2) that is being produced a new plant (engine and assembly), (3) with a new workforce, there are certainly opportunities for errors. So what's being done? John Krafcek, HMA's vice president of Product Development and Strategic Planning, says that they are particularly keen on keeping things in control. He cites the issues that Nissan had experienced with its Canton, MS, plant as a cautionary circumstance (and notes Hyundai has hired some people from Nissan who had experienced that situation to help them keep an eye on quality).

The fact that Hyundai still offers the best warranty in the business (10 years/100,000 miles powertrain; five years/60,000 miles bumper to bumper; etc.), undoubtedly ameliorates the concerns of some customers. Speaking to the issue of how the generous warranty is affecting the company, Krafcik observes, "Our costs are low—and continue to come in lower than what we'd provisioned." And in a discussion of Hyundai's world-wide experience, Johng Sik Choi, senior executive vice president, Hyundai Motor America, says that the U.S. warranty is by far the longest for all of the cars and trucks that Hyundai sells around the world—with most of the warranty periods being on the order of a more typical two to three years—yet specific country requirements aside, the vehicles are essentially identical from market to market.

 

Seeking Stability.

One benefit to the Montgomery operation is the fact that the Sonata has been in production in Korea since September, 2004. Not only has this afforded the Hyundai America people an opportunity to become familiar with the process (the processes and equipment used in the two plants are common), but Krafcek observes that generally, the six months before a vehicle is launched is the time during which there is a flurry of issues that arise and need to be addressed and that the number of these issues then diminishes in the months after launch. Consequently, he maintains, the six months of production in Korea will help the people in Montgomery achieve a stable operation. 

Krafcek notes that while the Santa Fe sport utility vehicle will also be produced in the plant (the plan calls for a 50:50 split of the 300,000 annual volume when full production rates are achieved), the Santa Fe will not go into production at the plant until 2006 so that the workers will be able to focus fully on the Sonata. Once again, the concern is to achieve the highest levels of quality.

 

Taking On the Best In Class.

The car that they've produced to go up against the competition, which they've studied with assiduous care, is meant to be more appealing than the previous-generation Sonata and to best the other cars in the category. From the design point of view, Hyundai put together a four-box matrix with Ornamented and Sophisticated on the X-axis and Personal Appearance and Family Appearance on the Z-axis. In the lower left quadrant (Ornamented and Family) there are, in order, the '05 Sonata, the current Malibu, and the Camry, which spills over to the lower right quadrant (Sophisticated and Family). The upper left quad includes the Mitsubishi Galant. The lower right quad is filled out with the Kia Optima, Pontiac G6 (which spills up to the upper right (Sophisticated and Personal), forthcoming Ford Fusion, and Accord. The upper right includes the Mazda6, Nissan Altima, and, making a swing from the closest to the Ornamented in the Family zone to the closest to the Sophisticated in the Personal zone, the Sonata. It has traveled far. (Incidentally, of the cars, the Camry, Accord, and Altima are in the first rank of the competitive set, with the Malibu and Fusion also included in the primary set; the other vehicles are, says Krafcik, in the "secondary" set vis-à-vis the Sonata's positioning.)

 

Safer Is Better.

One of the things that they're hanging their proverbial hats on is safety. So, for example, there are six standard airbags (two front; two front seat-mounted side; two side curtain airbags), active front seat head restraints, traction control, ABS with electronic brake distribution and, most notably, standard Electronic Stability Control (ESC). All of this standard.

From a marketing point of view, this installation of standard ESC makes the '06 Sonata the first midsize sedan to offer it standard—and realize that the starting price for the car is $17,895. From a larger point of view, Krafcik points out that according to the National Highway Traffic Safety Administration (NHTSA), passenger cars equipped with ESC have 35% fewer single-vehicle crashes and 30% fewer single-vehicle fatalities—and he, for one, feels good about offering the technology from a personal point of view. "What would you want your legacy to be?" he asks, rhetorically.

Another thing they can hang their proverbial hats in is the fact that based on the EPA volume measurements, it is classified as a "large car," not midsize. That is, its total volume (passenger + cargo) is 121.7-ft3, up from 114.1-ft3 for the previous generation. Accord, Camry and Altima are all smaller (at 116.7-, 118.5- and 118.4-ft3, respectively).

A new car ideally has a new engine. And so as they're shooting for the highest levels, the Sonata is so equipped. There are two new engines, the 3.3-liter Lambda G6DB V6 and the 2.4-liter G4KC four. The V6, which is rated at 235 hp @ 6,000 rpm and provides 226 lb-ft torque @ 3,500 rpm, is being built at the new engine plant in Alabama (see: Hyundai Goes Flex in Alabama; October, 2004, Automotive Design & Production). The four-cylinder-equipped Sonata will come from the Asan, Korea, Sonata plant, which was established in 1996. (They're estimating that 60% of the Sonata buyers will opt for the six-cylinder engine.)

Whereas the previous-generation car has ride and handling that are characterized by Krafcik as being "deliberate" and "soft," the new chassis setup is more firm and agile. There's engine-speed-sensitive, power-assisted rack and pinion steering. The front suspension has an independent double-wishbone design and gas-charged hydraulic shocks. The rear is an independent multi-link design, where the gas-charged shocks are also fitted.

While there is an array of standard features that stem from the entry level GL through the GLS and to the top-of-the-line LX (with things being added as one goes up the ladder), there is more than a marketing strategy behind this approach. According to Krafcik, there are "10 buildable combinations." That is, there are the three trim levels, two engines, and three transmissions (including a five-speed manual for the GL; both the four- and five-speed automatics have a sport-shift capability). The optional equipment is kept to a minimum. This is clearly in keeping with the sort of lean thinking that Krafcik is certainly more than cognizant of (see: From NUMMI to MIT to Ford to Hyundai: John Krafcik; January, 2005, Automotive Design & Production).

The Sonata is the second vehicle in the Hyundai 24/7—as in seven new vehicles in 24 months—product offensive. The first was the Tucson, launched in the fall of '04. Should Detroit be concerned? Yes. And so should Georgetown, Marysville, and Smyrna.