Hyundai turns up the heat on competitors

Hyundai is going for the jugular.

That's my take on the Feb. 1 announcement that the brand will offer free maintenance — oil and filter changes as well as tire rotations — during the first three years of ownership for U.S. buyers.

This from a brand that's on a roll. U.S. sales and market share are up. The only marques to score higher than Hyundai in last year's Initial Quality Study from J.D. Power were family members, Kia and Genesis. Its product portfolio is finally loaded with utility vehicles after relying on sedans for too long. Yet sedans aren't being neglected. The revised Sonata is an eye-catcher and an award winner, having just snagged Best Auto Tech honors from KBB.

So aside from the lingering scars from widely publicized engine recalls, Hyundai is in a pretty good place. And companies in good places just don't shell out for free maintenance. The desperate do.

Audi did it amid an unintended-acceleration crisis in the late 1980s. And Toyota went to freebie oil changes and more in 2010, after similarly battling a reputation for cars that were inexplicably running out of control.

Even Hyundai's previous above-and-beyond efforts have been birthed in tough times. Its signature 10-year/ 100,000-mile powertrain warranty was created in 1998 to confront a well-deserved reputation for lousy quality. The 2009 Assurance Plan allowed recession-wary buyers to return their cars if they lost their jobs.

That part of the program lasted two years. But the 10-year/100,000-mile guarantee remains an ownership pillar at Hyundai. And now it's creating another one.

The latest effort resulted from a mix of fresh and veteran Hyundai minds, Barry Ratzlaff, Hyundai Motor America's chief customer officer, tells my colleague Omari Gardner. Some 2018 research showed the idea had some potential.

Then last year, Jose Muñoz took over as U.S. chief executive — and parent company COO. He immediately saw a potential brand-builder, Ratzlaff says. And the thought of a hypothetical Hyundai salesperson sharing this message with a potential buyer may have been the clincher: "Yes, Toyota does offer 2 years and 25,000 miles. Hyundai covers you for 3 and 36."

So Ratzlaff, who has also worked at GM, Toyota and DaimlerChrysler in his 30-year career, found a way to offer the program.

The strategy carries risks. You'll find people in this industry who think it's a dumb idea, especially because of the cost. And Ratzlaff himself says dealer reaction has been mixed: It's tough for a dealership finance and insurance specialist to sell a prepaid maintenance plan — a big source of profits — when the brand is offering free oil changes.

He says he's working with Hyundai Capital to wrap other products around Hyundai Complimentary Maintenance.

But in the meantime, Hyundai is now handing out a new security blanket for the start of ownership to go along with those covering 5 (full vehicle), 7 (rust) and 10 (powertrain) years.

Marketing campaigns will drive the point home: It's all about peace of mind for Hyundai owners.

It should be reason for concern at Hyundai's rivals.