Hyundai will include the service on three models for 2006: the Sonata, the Alantra and the Santa Fe. In the 2007 model year, the service will be standard in all Hyundai cars.
"We're the first car company" to make it available on all models, said Hyundai of America CEO Bob Cosmai, who added that he believes it will attract "youthful" buyers and "become a step toward strengthening our brand image."
Hyundai surveyed customers before making the decision and found that people who asked for satellite preferred XM's service 2-to-1 over other companies' services, he said.
Cosmai added that the company considered whether to add a connection for MP3 players like Apple Computer's iPod, but Hyundai prefers to do an "integrated setup," building a product into the dashboard as opposed to having external hookups. He declined to say whether Hyundai was working on such a setup.
Although the equipment will not cost extra, the satellite services charge a monthly fee. XM recently increased its subscription rate to $12.95 per month.
The installation of satellite radios in new cars is a key growth area for the nascent pay-satellite radio industry, which comprises XM and smaller rival Sirius Satellite Radio. XM also has deals with General Motors and Toyota Motor. Sirius has deals with Ford Motor and DaimlerChrysler.
Reuters contributed to this report.
