The cars we loved.

2001-2005 Hyundai XG: The Evolution of Value

2003 Hyundai XG350

2003 Hyundai XG350

It seemed not long ago that the mention of Hyundai and luxury would inspire laughter. No one’s laughing now, but Hyundai was not always crossed shopped with the likes of the upper crust of entry luxury elite.  From a low point in the late 90’s, Hyundai had nowhere to go but up or out of the American market. Although it was improving with every new model, the rate of improvement began to pick up under what seemed like do or die situation. The Koreans must have thought that exporting a larger car would help the company’s image as a builder of luxury.  It had been building larger cars in its home market of Korea since the 80’s, but never dared exporting them. One of those cars, the Grandeur XG, came to be thanks to a Mitsubishi called the Debonair. The Debonair was considered a large car that looked like a cross between a Chrysler K car and one of the company’s Sigma sedans.

It would not be until the third generation of the Grandeur that Hyundai would try braving the waters of the American luxury market. The Sonata was improving, but had not yet shaken off its image of being an also ran to the Accord, Camry or Fusion for that matter. Besides, it was still too small despite growing with every new generation. So a clean sheet design (to Americans) was plucked from Hyundai’s domestic range for flagship duty in America.

The Grandeur name survived in Korea, but for most markets, the car would go by the name XG with an engine size number designation. Here we knew it as the XG300, then XG350.  The XG300 was an attractive if not derivative looking mid-sized luxury car. Its outward appearance was part Maybach in the rear and older Infinity everywhere else. All the lines that made XG’s inspiration interesting were missing to the point of blandness. Even the name sounded like a toy robot, with about as much personality.  As if not to offend anyone, the XG blended into the crowd all too well, much like the Toyota Avalon a primary competitor.

The XG went by many names, depending on where it was sold. There were a host of engines ranging from 2.0 four cylinder units all the way to the 3.0 V6 which was the only engine sold in America at the 2001 launch. With 197 hp, it was a straight forward design lacking variable valve timing, a must in most up market cars of the time. The XG’s front wheel drive placed it more inline with the Avalon than the rear wheel drive targets of its advertising.

2004 XG350 Interior

2004 XG350 Interior

There were lots of other luxury trappings to make up for the lack of rear wheel drive and fancy valve timing. So many, that the well appointed XG severely undercut the 5-Series and E-Class competition in the goods per dollar catagory.  Despite being loaded with value, strangely new-fangled gadgets like a navigation system was not offered. Map pockets for the doors compensated as well as reading lights in the B pillars for those moments where you were lost (this was in a time before smartphones took away our common sense).

Hyundai had big hopes for the XG. It would be a gateway to future luxury models, eventually putting the South Korean brand in the same company as Lexus in Infiniti. The Koreans actually had their sights set much higher. Hyundai ads often compared the XG with BMW, Audi and Mercedes. Despite the aggressive approach, the reality was that the XG offered quite a bit of Audi-like luxury for Accord and Camry prices. Value had been a Hyundai staple in the past, but the company made certain that the quality was there this time too , even as it had to convenience it’s dealer network first and later the public.

A redesign in 2004 changed the name to XG350 to reflect a new 3.5 litre V6. It was still in the 200 hp range, but had better response and efficiency. It was almost always mated to a five speed automatic transmission. Competent, but not earth shattering, it had actually grown bigger than the Avalon and weighing about 200 pounds more at 3600. The added heft may have contributed to the almost leisurely 0 to 60 times in the mid 8 second range. Top speed was 140 mph, but speed or performance was not what the XG was about. The independent suspension was tuned more for ride quality and comfort. The cabin with its wood trim gave the impression of luxury much like it did when such features popped up in Accords in the 90’s.

Affordable luxury much like its platform mate the Kia Amanti was Hyundai new calling card. Although the XG’s sales were short of expectations, they were good enough to encourage Hyundai to continuously improve on the luxury car formula. While Hyundai may not be synonymous with luxury just yet in the minds of some, it had made significant gains in less than a decade.

Looking back, the XG gamble seems to have worked. Although it was still overshadowed by the surprisingly upscale Sonata, the XG prepped the public for bigger cars from Hyundai in the future.  The XG would become the Azera in 2006 and sold well right up to the point that Hyundai’s real luxury car, the Genesis was introduced in 2008. Today the Azera is Hyundai’s entry point to a range of rear wheel drive luxury cars that include the Equus and Genesis

2001 Hyundai XG300

2001 Hyundai XG300


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This entry was posted on May 19, 2013 by in 00's, Hyundai and tagged , , , , .
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