Hyundai Future
Hyundai's creation of the best new car warranty in Canada is great news for people looking for a high-value vehicle at the lower end of the price ladder.
But this warranty should also benefit the Toronto-based distributor of Korean cars and light trucks because it's will draw attention to Hyundai and help it launch 11 new vehicles before the end of 2007, including three in segments it currently isn't in.
By extending the fully-transferable warranty to five years or 100,000 km from three years or 60,000 km, Hyundai Auto Canada is absolutely going to be saving a lot of its customers money in 2007 and beyond.
However, the Toronto-based company won't have to put up as much money as it would have even a couple of years ago, says president Steve Kelleher, because it's made the kind of quality improvements that make a lot of warranty work unnecessary.
Hyundai is now in the top-third on J. D. Power's quality studies, Kelleher says, but he isn't willing to be too specific on how that translates to the future of today's Hyundai models with the new warranty. All he'll says is that the Canadian firm's warranty costs have dropped more than 50 percent in the last six years.
''When it gets down to it,'' Kelleher says, ''our vehicle quality is what allows us to do this. When you build them better, you can back them better. When you can build quality vehicles and keep them on the road and out of the repair cost, you can do this.''
This will speak directly to Hyundai's traditional buyer base, he believes, because ''surveys have shown that warranties are important to consumers, and particularly to our consumers since our mix is at the lower end of the price scale where cost is important.''
By any count, Hyundai now has the best warranty in the business, beating even those of the luxury car companies, including BMW and Lexus. ''Our vehicles are now all high quality,'' Kelleher maintains, ''and this proves that to Canadian consumers.''
Making that point and drawing a line under it is critical to Hyundai right now, as the firm gets ready to launch all of those new products in the next 3.5 years.
Hyundai and its dealers particularly need to reach that half of Canadian consumers who currently aren't considering the Korean firm because it doesn't sell vehicles in the segments they're shopping.
By the end of 2007, Kelleher says, Hyundai will be in virtually every significant market in Canada, except for pickups. That means a minivan, an SUV smaller than the next generation of the Santa Fe (to be called the Tucson), an SUV larger than the next Santa Fe, and a crossover vehicle like the Buick Rendezvous.
As for a pickup truck, Kelleher advises that one is ''on the drawing board and being talked about.''
Kelleher says he's excited about the future of Hyundai in Canada, and so are the company's dealers. It has ''most potential of any company in Canada,'' he says. ''We'll be bringing in people who wouldn't have gone into a Hyundai store before, so there's a lot of upside to the franchise.''