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Hyundai Considering Rear-Drive, V-8 for U.S.

Hyundai embarks on a model expansion that promises to move it well beyond its economy-car image.

TRAVERSE CITY, MI – Hyundai Motor America might not be in need of a drastic image makeover, but a company executive says a little polishing couldn’t hurt.

John Krafcik, HMA vice president-product development and strategic planning, says the discernible customer shift to more fuel-efficient vehicle segments is playing to the company’s longstanding strengths.

But the auto maker expects to expand from its economy-car roots with a series of new models between now and 2010 that could shift it up-market.

Krafcik tells Ward’s Hyundai America is examining the possibility of bringing at least one V-8-powered model to the U.S., a strategy the company presaged with its Talus concept vehicle displayed at the North American International Auto Show in Detroit in January.

Hyundai is known to be searching for a “halo” vehicle for the U.S. market, and a model flaunting an American-style V-8 just might fit the bill.

“(Using a V-8) is one of the questions that goes along with ‘halo,’” Krafcik says. He does not confirm the auto maker has made the decision.

But he concedes that besides the V-8-powered Talus concept, the company has considerable experience with V-8-powered cars in Asia, where its Equus luxury car currently uses a V-8 to drive the front wheels.

And that brings Hyundai to another crossroads: front-wheel drive. All of its current eight models in the U.S. – soon to be nine with the Veracruz midsize cross/utility vehicle, whose name was announced this week at the Management Briefing Seminars here – are FWD or all-wheel drive based on a FWD layout.

Krafcik says the auto maker continues to examine the possibility of introducing RWD vehicles in the U.S. RWD generally is used for premium vehicles and body-on-frame pickups and SUVs.

Krafcik says Hyundai has three all-new vehicles coming to the U.S. by 2010 and another redesign of an existing nameplate that is significantly changed from its current form. Krafcik also confirms the company’s desire to develop a RWD sport coupe.

A RWD version of its existing FWD Tiburon sport coupe could satisfy many of the above conditions. Krafcik will not confirm whether any future RWD Hyundai sport coupe also might be V-8-powered, however.

He says any future RWD Hyundais would share “our rear-drive component set we’re now developing in Korea. We’re considering right now what’s the best way to use that in the U.S. market.”

Krafcik says it’s also possible the use of those components eventually would result in more than one RWD Hyundai for the U.S.

As for current models, Krafcik says the auto maker is experiencing strong demand for its Accent subcompact, and that new B-segment entries such as the Honda Fit and Toyota Yaris have “brought a lot of interest to the segment. Demand for the Accent is really stressing our plants.”

He says Hyundai also has its eye on the resurgent interest in sporty hatchbacks, such as the Honda Civic Si and Volkswagen GTi.

Hyundai recently launched a sporty SE variant of the 3-door Accent and a 4-door Accent SE that will compete with new 4-door versions of the Civic Si and VW GTi, as well.

And says Krafcik: “We are watching very carefully the 4-cyl. turbo” trend in compact and midsize SUVs and passenger cars.

He says it is interesting that many recent new compact CUVs, such as the Acura RDX and Mazda CX-7, have turbocharged 4-cyls. as their standard powerplant, rather than the V-6s that have dominated the segment.

Although the new-age turbocharged 4-cyls. do not present any real-world fuel-economy advantages over most V-6s, Krafcik says customers likely will perceive the smaller, boosted engines to be a more economical choice.

The new Veracruz CUV, built on a stretched version of the Sante Fe unibody platform, will be powered by a 3.8L DOHC V-6 coupled to a 6-speed automatic transmission, he says. It will be unveiled at the Detroit auto show in January and go on sale later in the year.

Larger than Honda’s Pilot and boasting more cargo-capacity than Mercedes-Benz’s new GL-Class fullsize CUV, the Veracruz “is exactly where you want be,” in terms of size and market positioning, Krafcik says. “The body-on-frame (SUV segment) is dropping like a rock. All that slack is being taken up by the unibody platforms.”

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