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"HYUNDAI means QUALITY"

"Quality. Hyundai means quality. And value. But you have to get quality in order to have value".

 

Interview with Chris Hosford,
Vice President, Corporate Communications of Hyundai Motor America

 

Held on May 22, 2008 at Hyundai Motor Manufacturing Alabama (HMMA), in Montgomery, AL, during the launch of the new Sonata 2009. Mr. Hosford talked about the upcoming products from Hyundai, the company's next fuel plans and how the oil crisis will affect the car market, among some other topics. Would we see a pick-up from Hyundai no matter what? This is what this gentleman and a remarkable executive told us...

 

By PEPE FORTE, i-friedegg.com publisher and a SAMA member.

 

—Mr. Hosford, how do you evaluate the first three years of HMMA?

—I think the plant has come a huge way from the first step on the ground five years ago and three years ago at the Grand Opening to today, with about a thousand cars a day. We employ more than 3200 people, and we build cars of such a high quality as the Santa Fe, that was selected as a Top Ten Pick by Consumer Reports this year. So, it is a great move from the beginning.

 

—How do you feel about the 'refreshment' of the new Sonata?

—The 2009 Sonata is amazing, I've driven the car a number of miles and I was so excited because the differences are very clear. When you get in the first thing that you see is how much better the new interior looks, it's just fabulous, the beautiful center stack... if you get the navigation package it's all voice activated, also the radio... very simple to use too, some of the controls in other vehicles can be very confusing, not here, a real delight. On the road the 4 cylinder has more power and gets better fuel economy, so that's kind of a perfect redo of that engine. The car is more responsive, we've made over a thousand changes in total, even if it is not a totally new model we wanted to be sure that our customers get the best, and those thousands changes will guarantee that.

 

—Are you building the Hyundai engines for this vehicles in this plant or..?

—Yes. The V6 is currently made here and the four cylinder engine will be completed this summer. So, in a very brief period of time we'll have the engines for this vehicles built right here in Alabama.

—What can you say about the first truly luxury car from Hyundai?

—What I'd like to say is that the Genesis got the room and comfort of the 7 Series BMW, with the performance of the 5 Series BMW at the price of the 3 Series BMW, which we think is a bargain by anybody's standards.

—Do you have any idea, in general, of how much the Genesis will be?

—I don't have a specific number for you right now, but we will be announcing the price fairly soon.

—I'm sorry that I asked you that sort of tricky question that makes me look that I'm seeking for information that you can not release... but the thing is that I'm trying to follow up a linked idea... let's see: which is the most expensive Sonata model?

—The most expensive model from the Sonata would be about $24 thousand with leather, V-6 engine, sunroof, power-everything... but above that we have the Azera that...

—That's where I'm going...
 
—...and above that in price, although a different kind of a car, is the Veracruz... so, today we have customers that are currently paying $38 thousand for a loaded Veracruz, so we know already that people will buy Hyundai in that price class, and $38 thousand is certainly more than where the Genesis will start from. So it's gonna be a challenge, the market today is very tough, but I think we have a real opportunity to build and sell this great sedan. I think that our current owners are gonna find out that they are ready to move up to it, and there are others that are going to come to our brand and say, holly cow, I was looking at a BMW but, you know?, this is a better car, and it costs less money! So it's gotta happen.

—That's right, but let me round up the idea: I don't want you to go thrú what I call the NMS or Nissan Maxima Syndrome —and frankly this has been happening to some other models—. I mean... that vehicle, which is a great car, suddenly turns into a victim of a crossfire inside the very family, since it's crucified by a high-end Altima and the lowest entry level Infiniti. Placing this bad case scenario in Hyundai, could the Azera be the next NMS 'patient', caught in a whirpool between the best Sonata and the 'poorest' Genesis?

—Well the truth is that you never know until you try. Once again, the market is very different today than it was when we first began the plans to develop the Genesis, but I think there is room for both. The Genesis is significantly larger, is significantly more luxurious, is significantly more powerful and as a consequence is going to be significantly more expensive than the Azera. So I think that there's still going to be a place for the Azera customers to go, I do think that there's someone who's had one or two Azeras maybe for two, three or four years on their current Azera and might bring 'em in and might seriously look at the Genesis because it might be their next step up that they wanted to make.

—Following the Genesis issue: The Tiburon will be gone soon. Is the upcoming Genesis coupe the replacement for the Tib..?

—It's a little complicated... the Genesis coupe is of course a two door four passenger... same basic package as the Tiburon but in fact is quite different. It is a larger car, it has a front engine with rear wheel drive, frankly more performance oriented than the current Tiburon. The Genesis coupe pretty fits kind of a slot above where the Tiburon is today. In the not too far distance future —not in the next 24 month but probably in the next 36—, you are gonna see the replacement for the Tiburon. It's possible that we might even call it something different than the Tiburon, but that will be a front wheel drive, an affordable and economical car, well below where the Genesis coupe will be seated.

—Today we've got the news that we've reached the one hundred and thirty something dollars an oil barrel barrier. So, which are the company's plans of fuel alternatives for the immediate future?

—Well, one of the cars that we make here at the plant is the Hyundai Sonata with a 4 cylinder engine, which is now about 70% of the total volume. That car gets 32mpg in the highway and 22 in the city, so right away we are certainly focused in that. But looking a little further, we think that Diesel technology is going to be important to Hyundai. We're actually active in Diesel vehicles that are sold now both in Europe and in Asia, and particularly in the home country of Korea. We are looking at a number diesels for the U.S. We haven't made any final determination about which ones we might select for this market. The other thing is that I think is on everybody's mind today is hybrid vehicles. The company currently has a fleet of more than 2000 hybrid vehicles in Korea running in a variety of evaluation tests, with a number of  different agencies there... I think we'll see hybrids from Hyundai in the United States market in a short period of time... not tomorrow, but not too far down the road. It is something that we know the customers are interested in and we need to provide the customer with what they are looking for.

—O.K: Maybe because of the crisis of gas, I've heard rumors that the plans that you had for your own pick up —together with Kia— have been declined. What can you tell me about that?

—I really don't have a lot to tell you about that... I do know it is in the news, and I know that at one point it was described as a Kia pick-up (of course I work for Hyundai), but I would tell you that certainly given this current market it doesn't make sense for Hyundai Motor America to have a pick-up truck in the current market. But is not a definitive decision yet.

—And... any plans for another (a bigger) SUV to fill up the eventual vacant slot for the ill-fated pick-up?

—I think that at the present time and in this market, larger SUV's, larger than the Veracruz that we have now which is about the size of the Lexus RX350, certainly in our short term future we are not...  

—But you have a V-8 now  —I jumped in—... A super nice engine for just one car?

—That's what I was about to say... now we have a larger engine, the first V-8 we ever sold in the United States, which it will be in our Genesis sedan coming out in just a few months during the summer. This V-8 is a very flexible engine, really a remarkable engine, it has the highest specific output, that is horsepower leader and anything in its class, so it is an excellent engine and I think that could be tuned for a number of different applications. The first application?: Genesis sedan, a nice luxury car, is like a BMW or a Lexus or a Mercedes... but looking down the road, could that engine be used in other kind of vehicles? If this is your question, absolutely yes.

—According to the unstoppable rocketed price of gas today (which is changing every minute), what do you think is going to happen to the car market in the USA? Will we see a dramatic change in our driving habits, the way we've been buying cars and so..?

—I think that the cars we are used to drive in will be still available. The question is what does the customer want. We are going to continue to make the same kind of cars we make now, including the larger ones, including a V-8 power sedan. The question is what the whole market is gonna do. It seems clearly so far that what the whole market wants today is small cars. We've doubled the volume of the Accents and the sales of the Elantra —which is our compact car— are way up. So a number of people are looking at that. We are very happy that we've been able to hold our Sonata's sales as about the same level. So we are definitively seeing a growth in the smaller cars segment and I think this is true for almost every manufacturer.

—Precisely: Is it in Hyundai's short term future a smaller car like the Yaris in Toyota or a Fit from Honda... something like that?

—We are looking at that. Actually if you look at the Accent three door, which is the two door plus hatchback access, is very close inside to the Yaris. But we are definitively looking at something that is a little smaller, I mean a little smaller engine, little higher fuel economy. Typically in the past Americans were not really interested in small cars, but with the price of gas, which eventually will settle —certainly that it doesn't seem it's gonna go down to $2.00 a gallon ever—, I think there's a new place for cars in that category. We don't have it today but is something that we are looking at very seriously for the nearest future.

—In terms of rivalry, who would you say is the Hyundai's main target... the Japanese products?

—Today when people shop Hyundai they are primarily shopping the other Japanese Big Three: Honda, Toyota and Nissan. They are all great car companies, but I think that Toyota is really the one that we looked to as our competitor. It's the world largest car company, it has an enviable record of quality... we have a great quality record too!, but their record is frankly longer than ours and so we continue to look at them as the leader. But in the end we are not trying to be Toyota, we are trying to be Hyundai and that we think is really critical, we have to be who we are in order to attract more buyers to our brand.

—Would you like to add something that I've haven't asked you and you consider it's important to say?

—Yes. Here at Hyundai, whatever else we may be doing, we are always looking at quality. Our Chairman in Korea. Mr. M.K. Chung has said the quality is number one priority in this company. Without that we can't even think about competing. So whatever we are doing, whether is a three door Accent for $11 thousand or a Genesis V-8 power sedan that would show a higher price, every one of those cars must have the best in quality. We are so happy that Consumer Reports picked two Hyundais in their Top Ten vehicles, the Elantra and the Santa Fe. So we just couldn't be happier with that and we know that quality is something that is a constant effort, you can never give up, you have to be always be focused on it, you can't never waver for a moment from that commitment. That's why is so much fun to come here to HMMA because we see it everyday, we see it in a way that each one of the people on the line works.

—Would you please define Hyundai in one word?

Quality. Hyundai means quality. And the second word would be value. But you have to get quality in order to have value.

—It's been a pleasure to talk to you, Mr. Hosford. Thank you very much.

—Oh, no, thanks to you. Mr. Forte.

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