Jan. 21 (Bloomberg) -- Hyundai Motor Co. today will unveil a deal with Verizon Communications Inc. to provide wireless service in its U.S. cars and trucks, signaling the importance of the connected auto as the must-have feature for drivers.
Verizon’s service will appear this year on 2015 Hyundai models, starting with the Genesis sedan arriving in showrooms in May, Mark Bartolomeo, a vice president at Verizon Enterprise Solutions, said in an interview. Initially, cars will use 3G wireless service and eventually will feature faster 4G technology. The Verizon service will also appear in Kia vehicles, Seoul, South Korea-based Hyundai’s corporate sibling.
Automakers are rushing to link their models to the Internet. In-car technology is the top selling point for 39 percent of auto buyers today, eclipsing performance measures such as horsepower, Accenture has said. General Motors Co. (GM:US), the biggest U.S. automaker, was one of several carmakers this month to unveil similar deals, when it announced a pact with AT&T Inc. to provide 4G LTE wireless service in its Chevrolet models.
“We chose Verizon because of their coverage and quality, while other outlets have issues with dropped calls,” Miles Johnson, a Hyundai spokesman, said in an interview. “Verizon’s coverage is more robust.”
The number of cars connected to the Internet worldwide will grow more than sixfold to 152 million in 2020 from 23 million now, according to researcher IHS Automotive. GM, Volkswagen AG (VLKAY:US)’s Audi brand and Tesla Motors Inc. each revealed plans this month to offer Web service in their cars, including Wi-Fi hot spots for tablets and laptops. Verizon also has deals with Daimler AG’s Mercedes-Benz and Toyota Motor Corp., Bartolomeo said.
Verizon’s service will eventually be offered in all of Hyundai’s U.S. models, he said. Hyundai sold 720,783 cars and trucks in the U.S. last year, up 2.5 percent from 2012. Kia sold 535,179 models in the U.S. in 2013, down 4 percent from a year earlier.
GM’s 2.8 million vehicles sold in the U.S. last year were more than double the combined sales of Hyundai and Kia.
Verizon will provide a range of connected services to the Hyundai and Kia models, including safety, security, vehicle diagnostics and “infotainment,” Bartolomeo said.
“They are looking to deliver the video and the streaming into the back seat, as well as navigation and traffic conditions,” Bartolomeo said. “The automakers are saying, ‘What’s the best way to enhance the customer experience?’”
Video streaming and wireless hot spots will not initially be part of Hyundai’s second generation “Blue Link” connected car service, Johnson, the spokesman, said. He also said 4G isn’t part of the initial introduction of its partnership with Verizon.
Fourth-generation “is certainly the future and certainly out there,” Johnson said. “We just don’t need that high a bandwidth yet.”
Hyundai’s second-generation Blue Link system will debut in the company’s upscale Genesis model. It will include Google Inc. (GOOG:US)’s search capability in its navigation system and a Google Glass application to enable the use of the technology giant’s new glasses, which project text and images that respond to voice commands and swipes on the frame. Hyundai owners can use the Google Glass app to remotely start their car or unlock their doors, search for gasoline stations or call for roadside assistance.
The deal with Verizon will allow Hyundai to offer such services faster, Bartolomeo said.
And Verizon customers will be able to add their cars to their monthly rate plans, at prices that haven’t yet been set, he said.
“We’re in the process right now of establishing some bundled rate plans for various types of data services,” Bartolomeo said. “The value of this partnership is around infotainment.”
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