Hyundai chases young buyers with Veloster

Hyundai is counting on the Veloster sporty coupe to boost its street cred among Gen Y buyers.

The successor to the Tiburon coupe--which was last produced as a 2008 model--is the brainchild of Hyundai Motor America's product planning department. Roughly five years ago, U.S. officials began making the case to the Korean parent company for an affordable sporty car to draw young buyers to the brand. Gen Y consumers are those born between the early 1980s and the early 1990s.

The initiative led to the Veloster concept that debuted at the Seoul auto show in 2007--and the production car that began arriving at dealerships this month.

The basics: The Veloster is a front-wheel-drive hatchback with a third door on the rear passenger side. The car has MacPherson struts up front and a new torsion-beam rear suspension designed to add stiffness and reduce body roll. Overall, the suspension tuning is tighter and sportier than that of Hyundai's Elantra compact, which has a similar platform.

Under the hood is the same 1.6-liter direct-injection, four-cylinder gasoline engine that powers Hyundai's Accent subcompact. The engine is combined with a six-speed manual transmission in the base model. A new Hyundai-developed dual-clutch transmission is optional.

Notable features: A 7-inch touch screen that operates the car's infotainment system is standard. Pandora Internet radio is embedded, allowing occupants to play Internet radio from their iPhones through the car's sound system. Bluetooth and XM Satellite Radio also are standard.

Veloster buyers also will get a free trial of Hyundai's Blue Link telematics system. Blue Link, similar to General Motors' OnStar, offers roadside assistance, automatic crash notification, voice-activated destination searching, turn-by-turn navigation, voice-activated text messaging, and other functions.

What Hyundai says: "Typically when you think of a halo product, it's very expensive," and out of reach of most young buyers, says Mike O'Brien, vice president of product planning for Hyundai Motor America. "In this case, we want to have a product in the bottom of our lineup that allows the customer to look at us in a different way."

Compromises and shortcomings: The Veloster's 1.6-liter, four-cylinder engine sacrifices straight-line speed and acceleration out of corners for fuel efficiency. Hyundai says it opted for the 1.6-liter because the car would not have hit its 40 mpg highway fuel economy target with a bigger engine.

The market: Hyundai Motor America CEO John Krafcik declined to give an annual sales target. But at the Veloster's debut at the Detroit auto show in January, U.S. sales boss Dave Zuchowski estimated 40,000 sales annually--if the United States receives an adequate share of the car's global production volume.

Krafcik said Hyundai is beginning its global production and sales volume planning for 2012. He said the Veloster's U.S. allocation is unknown.

Hyundai considers the Scion tC and Honda CR-Z to be the Veloster's primary competition.

The Mini Cooper, Volkswagen Beetle, and Fiat 500 are regarded as indirect competitors. The base Veloster with manual transmission starts at $18,060, including delivery.

The skinny: There is room for a faster and more expensive version of the Veloster. Buyers looking for a high-tech, stylish ride that stands out on the road should find the Veloster appealing. Buyers who want a more performance-oriented Veloster may have to wait until next summer, when company sources say a turbocharged version with sportier suspension tuning could arrive in showrooms.

(Source: Automotive News)