Hyundai Is Working on the Next Great Niche

Hyundai Is Working on the Next Great Niche

By Bill Visnic

CHICAGO — Even before unveiling its redesigned Sonata sedan and a low-slung hydrogen fuel-cell concept car at the recent Chicago auto show here, John Krafcik was already talking about Hyundai Motor America’s next big ideas.

Agreeing the company appears to have most conventional U.S. market segments covered, Krafcik, HMA’s vice president of product development and strategic planning, told AutoObserver the company now is under way with an advanced-planning initiative to identify — or create — new market niches and evaluate the potential for Hyundai to develop appropriate new vehicles.

Hyundai’s advanced product-development process is called i2, Krafcik said, and it is staffed with a cross-functional team representing design, marketing, sales and engineering, among others. The i2 program has dedicated space at the company’s California design and technical center.

Krafcik said the i2 team is forming advanced plans for future models — that “don’t follow any conventional segmentation.” Some of i2’s unique ideas and new-model proposals “will have very pure environmental messages,” he said. This, perhaps, in an effort to help Hyundai recover ground lost to its major Asian and U.S. rivals — this company that aches to compete head-to-head with giants such as Toyota Motor Corp. and General Motors Corp. has yet to deliver in the U.S. with a hybrid-electric vehicle or a diesel-powered model.

Instead, Hyundai in fact appears to be headed in the opposite direction, unveiling at the Detroit auto show in January the Genesis, an all-new, rear-wheel-drive premium sedan with a throbbing 368-horsepower V8.

A bit out of sync with the times — particularly when you still don’t have a hybrid in the market?

Krafcik is unflustered by the potential for Genesis’ presence to make Hyundai appear arrogant — or oblivious. He said there’s a method to Hyundai’s madness: The 4.6-liter V8 — Hyundai’s first — is about establishing the company’s image, “a demonstration of our technological prowess.”

He said development of the Tau V8 was shepherded by the president of research and development at Hyundai’s automotive division, an engineer who was educated in the U.S. and developed the first Hyundai automotive engine to be designed wholly in-house, the Alpha four-cylinder engine architecture.

“How many other global automakers have a president-level guy who can design an engine?” Krafcik said. He said the Tau is extremely advanced, as proven by its high specific output of 80 horsepower per liter. Ford Motor Co.’s well-regarded overhead-cam V8, for example, which is the same size at 4.6 liters, develops about 50 hp less than Hyundai’s new Tau.

Krafcik said the Tau V8, and equally symbolically, the Genesis sedan — are important, if seemingly mistimed for a U.S. market focused on fuel economy — in establishing Hyundai’s credentials as a full-line automaker. After Genesis — still a conventional car in a conventional segment — it’s up to Hyundai’s new i2 process (and team) to identify new customer desires and fresh market opportunities that will make Hyundai the breakout company it believes it can be.

Photos by Hyundai
1- Hyundai's John Krafcik introduces the 2009 Hyundai Sonata at the Chicago auto show.
2 - 2009 Hyundai Genesis
3 - 2009 Hyundai Genesis V8 engine

Michelle Krebs:  is Editor-in-Chief of AutoObserver.com. Follow @AutoObserver on Twitter.