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Hyundai looks to the skies

Hyundai is boldly going where other carmakers have not--at least not yet--using technology from outer space to woo terrestrial buyers in the United States.

The carmaker on Wednesday announced that it will offer XM Satellite Radio receivers for no charge in all models by its 2007 model year. It's not the only carmaker to offer the technology, as XM has been available in GM, Honda and Nissan models for some time. But Hyundai will offer it more broadly and at a lower cost than others have to date, the company's CEO, Bob Cosmai, told CNET in an interview. Hyundai models such as the Santa Fe SUV, in addition to coming straight from the factory with XM-ready radios, will aso include a free three-month XM subscription for their new owners. Normally, the service costs $13 a month.

Overall, Hyundai is looking to enhance its brand image to appear at once more youthful and more of a value. The bottom line for consumers, however, should be the ripple effect created by the announcement. Hyundai's XM deal, announced at this week's New York International Auto Show, should get competitors' attention. That means that the prices carmakers charge to add satellite receivers could come down. Volkswagen, for example, charges $375 to add an XM receiver. There are undoubtedly at least a few people who balk at paying hundreds up front for a satellite receiver, but who might pony up the $13 monthly fee if the device is already there.

Still, Hyundai has yet to make a connection with Apple Computer's iPod or any other MP3 players. CEO Cosmai declined to discuss its plans for that—if it has any at all—at this time. At least at first, the company wanted to present buyers with "one integrated setup," Cosmai said. By that he means a dash without a music player sprouting out of it. BMW has shown, however, that it is possible to tuck an iPod into the glove box. Thus maybe for its next trick, Hyundai will offer an iPod for free?