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Link: http://www.detnews.com/2005/insiders/0508/23/C01-289592.htm

Hyundai is poised to challenge Japan's midsize car crown

By Christine Tierney / The Detroit News

With the exception of full-size pickups, perhaps no segment is tougher to crack than the U.S. midsize car market. For years, the Toyota Camry and Honda Accord have been the top sellers, and Hyundai Motor Co. harbored no illusions about its competitive standing against the Japanese stalwarts.

In spite of the South Korean automaker's rapid sales growth, four in five U.S. car buyers don't know, don't like or don't trust the brand, according to Hyundai's own research.

So Hyundai conceived a two-pronged approach to get its new Sonata onto car shoppers' lists: It retains its generous warranty, and offers more standard safety equipment on the Sonata than any automaker competing in that segment.

Every Sonata is fitted with six airbags. It is also the first midsize car sold in the United States equipped with electronic stability control -- a sophisticated anti-skid technology developed in the 1990s for German luxury cars.

Studies in Germany and Sweden, where the technology is widespread, show that vehicles equipped with electronic stability are involved in significantly fewer accidents.

Hyundai's new pitch to offer class-leading safety equipment in every segment represents a step in the automaker's gradual evolution from being the manufacturer touting the biggest bargain to one striving to compete on the basis of vehicle content.

As a result, the Sonata is no longer the lowest-priced contender in the midsize segment. Ford Motor Co. points out that its new Fusion, which hits showrooms next month, costs around $500 less than the Sonata.

Hyundai officials counter that the Fusion costs less because it offers less -- Ford doesn't even offer antilock braking systems as standard equipment on the Fusion. "ABS, a very basic piece of safety equipment, is optional," says John Krafcik, vice president for product development and strategic planning at Hyundai Motor America.

Ford officials say consumers prefer to have a choice to buy safety features as options, with ABS costing just under $500.

With the two midsize cars coming out within months of each other, auto market experts will be watching to see the effect on consumers. Are they more sensitive to price? To content? Has safety become a selling point?

As for the success of the Camry and Accord, auto experts attribute it to the vehicles' reputations for quality and reliability and the powerful brand loyalty of Honda and Toyota owners.

Hyundai cited a study polling consumers on which brands they trusted and which made the safest vehicles that ranked Toyota and Honda in the lead, followed by Volkswagen, Nissan, Saturn, Ford -- and then Hyundai, followed by sister brand Kia.

Mindful that there are still many skeptics out there, Hyundai offers a 10-year or 100,000-mile warranty on the Sonata. Hyundai quality has improved dramatically, but its image suffers from shoddy quality in past years. "Until we close that gap, we'll continue to offer America's best warranty," says Krafcik. And for a lot more equipment.

You can reach Christine Tierney at (313) 222-1463 or [email protected] detnews.com.

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