Microsoft hopes to SYNC up with the auto industry. The software giant's high-tech infotainment system has been one of the few big success stories for Ford Motor Co. this past year, drawing in the sort of high-tech-savvy buyers who might normally steer over to an import brand.

Now with Ford about to lose its brief exclusive on the SYNC system, Microsoft is ready to make a major push into the auto industry, the Detroit News reports. The Washington-based software company "will announce a massive new investment in its automotive business unit," the paper reports. And it has tapped Detroit native and Microsoft veteran Tom Phillips to head the operation.

"We know that things are tough for the auto industry, but it's the perfect time to make this investment," said Phillips. "There are new customers coming into the market and they are looking for new experiences."

There's been a general trend toward increasing the level of electronics in the average car. High-line manufacturers, such as BMW, with its complex iDrive system, can have more than $10,000 in silicon-controlled systems, ranging from engine, chassis, and safety controls to navigation and in-car entertainment. Even low-end vehicles are being offered with high-tech hardware.

Part of the challenge is to come up with technology that not only offers a wide array of features, but that is also easy to use. BMW has been repeatedly faulted for the complexity of iDrive, and plans a complete remake of the system shortly. Microsoft, however, has won kudos for SYNC, which offers the driver a variety of ways to issue a command, including one of the best voice control systems on the market. Ford recently launched a second-generation SYNC system that adds such features as traffic and weather, along with the ability to track restaurants, movie schedules, and gas prices.

Using SYNC as a come-on in its entry-level sedan, Ford has reportedly driven up the average transaction price on its Focus by $1,000 over the past year. As it expands availability, he automaker expects to sell about 1 million vehicles equipped with SYNC by the end of 2009.

But as with much of the technology provided by outside suppliers, manufacturers like Ford are generally granted limited exclusivity. And Microsoft is already beginning to license the SYNC system to other manufacturers, including the Korean upstart Hyundai, which expects to bring its own version to market within the next several years.

OK, full disclosure: I am in love with the new Audi A4. And I am quite frustrated that once again, the German maker has decided to delay a hot new product's U.S. launch for a year while European motorists get first crack.

The redone A4, the all-new A5, the striking R8--there are plenty of reasons to be paying close attention to Audi, and that's exactly what's happening in much of the world. The latest sales numbers show the carmaker sold an impressive 426,200 cars and crossovers during the first five months of this year, an increase of 1.5 percent, which is no mean feat in today's climate.

"We are already ahead of schedule," declares Audi chairman Rupert Stadler, solidly on track to break the 1 million mark for all of 2008--the first time that would happen for Volkswagen AG's upmarket subsidiary. Though there are plenty of headwinds threatening to slow the auto industry down, Audi has the advantage of having an array of new products, such as the A4, ramping up to full production in the coming months.

The picture's a positive one virtually everywhere you look. Indeed, in many parts of Europe, the brand with the four rings is now outselling both Mercedes-Benz and BMW. Countering the generally downward trend among foreign brands, Audi continued gaining ground in Japan during the first five months of the year. In China, where the brand is celebrating its 20th anniversary, sales jumped 23.4 percent, through May, total volume topping 50,000.

Among the rare exceptions, the U.S. is the bad news bear, sales slipping nearly 3 percent, to just under 37,000. OK, blame the phase-out of the old A4, if you wish, but even if you were to adjust the numbers, the U.S. would still be lagging the smaller Chinese market, and not even keeping up with the U.K., where sales, so far, have nipped the 50,000 mark.

For any number of reasons, Audi has consistently failed to connect with U.S. motorists. The pat response is to blame the unintended acceleration brouhaha, but that's more than 20 years in the past, never mind it was effectively disproven. Even Infiniti is outpacing the German maker here in the States.

What do motorists elsewhere know? They clearly recognize Audi's reputation for design, especially interior styling, where it is generally considered the benchmark. Products like the R8 and S5 stand up in terms of performance, as well.

Perhaps, once it finally arrives here, the new A4 will finally connect with those American luxury buyers who aren't blindly loyal to the brands they see at the country club. Initial reviews suggest it's among the best entries ever in the compact segment. We'll tell you more when we spend more time behind the wheel.

Among the cars I am test-driving this week is a BMW M3 Coupe. It is, as you might expect, a joy to drive. But it is painful to refill, averaging barely 17 mpg and demanding nothing less than the choicest of premium gas.

OK, when you’re spending $53,800 on a high-performance two-door, I guess you can expect – and afford – to pay for high-octane. But I got a surprise this morning when I opened up my print edition of the Detroit Free Press and found a telling report by old friend Mark Phelan. Seems an unexpected number of today’s cars require premium fuel, many of them not in the same category of performance that might justify that requirement for the M3.

Who would expect Smart to recommend high-test for its little fortwo? The smallest car in the country requiring the highest octane? Yep. But so do the Mini Cooper and new Mini Cooper Clubman, at least if you follow factory recommendations.

Among mid-size sedans, the list of premium sippers includes the Volkswagen Passat, Nissan Maxima, and Nissan Altima V8.

BMWs, no surprise, often require the most expensive fuels. That may be fine on models like the big 750iL and the high-performance M-editions, but the little X3 Sport-Activity Vehicle? Acura also requires high-test for its compact RDX crossover. And I was disappointed to realize the Mazda CX-7 also should be fueled with premium, as are the Nissan Murano and Toyota FJ Cruiser. Considering the latter ute’s positioning as an affordable toy, young buyers may be in for a big surprise at the pump.

You may notice that there’s not a single American model in the above list, and indeed, the Big Three have made a valiant effort in recent years to switch to regular whenever possible. There are a few exceptions, such as the Cadillac CTSv and Ford’s Shelby Cobra, but even the hot Mustang Bullitt can run on regular.

Among import premium brands, however, like Mercedes-Benz, Lexus, and Audi, premium is the fuel of preference for most, though not all, models.

Premium fuel is often the only way to deliver the maximum performance out of today’s engines. Indeed, the average new powertrain delivers significantly more horsepower and torque per liter of displacement than comparable engines of generations past.

But there is some good news for those who take the time to carefully read their owner’s manual. While the products we’ve listed – and others – may be designed to run best on premium, many can operate on regular or mid-grade fuels, as well, thanks to their sophisticated computer control systems. You will almost certainly experience a decline in performance, however. Before you switch, make sure to check that manual, however. Running regular in an engine that can only handle premium could cause serious damage and void your warranty.

Is Hyundai getting ready to unleash a wave of new luxury car products? The decision will likely depend on what happens once the automaker’s new Genesis sedan reaches the U.S. market in the coming months, various senior company officials revealed during a tour of Hyundai operations in South Korea this week.

The long-awaited Genesis sedan is already on sale in Hyundai’s home market, but the real measure of its success will be the response the company gets in the States, a market that currently accounts for more than a fifth of the automaker’s total global volume, suggested Vice Chairman Dong-Jin Kim.

“We put a lot of importance into Genesis and would like to see it succeed,” stressed the executive, during a wide-ranging conversation. “If we succeed with Genesis, we (will be) confident to introduce more products into the luxury market in the future.”

The initial Genesis sedan is a relatively conservative-looking vehicle, but one that plays to Hyundai’s traditional strengths: It will feature a high level of content, but carry a relatively low sticker price – starting somewhere just under $30,000 for the V-6 model – and carry the automaker’s 10-year warranty.

Early next year, a second version of the low-luxury model will launch, and it will be “much more expressive” in design, asserted S.G. Oh, Hyundai’s worldwide design director. Sightings of the Genesis Coupe, on Hyundai’s test track, confirm that the production version is essentially identical to the concept version displayed at this year’s New York Auto Show.

Oh, and several other Hyundai officials confirmed that a number of other luxury vehicles are in various stages of development. But what happens with those various models has not been completely determined yet, for at some levels, the Genesis project is still a concept in process.

At one point, Hyundai gave strong consideration to launching an entirely new luxury marque, much like Toyota’s Lexus brand and Nissan’s Infiniti. But the much-debated strategy was effectively sidelined by the consulting firm Hyundai hired. Its conclusion, said CEO and Vice Chairman Kim, was very negative.

“It would cost us too much money,” Kim said Hyundai realized, somewhere in the neighborhood of $2.5 billion for the retail network alone. That’s on top of the $500 million invested in the development of the first Genesis products, and to support a network would require a number of additional vehicles. “It would take 13 years to break even,” Kim added, “and 20 years to recover our losses.”

So at least for now, Genesis will be sold in the States through existing Hyundai dealers, though the automaker will reserve the possibility of spinning off the two new cars – and future models – into a Lexus-like sales channel sometime in the future.

As to initial sales goals, the Vice Chairman said he expects the U.S. to account for nearly 40 percent of the Genesis sedan’s first-year volume – the global target is 80,000, with the car going to not only the U.S. and Korea, but a number of emerging markets, like Saudi Arabia, China, and Russia. “The main market for the Coupe is the U.S.,” Dr. Kim added, and of a targeted 60,000 global sales, he is hoping to reach 25,000 in the States.

While the numbers are relatively modest, at least when compared to competitors like Lexus, Infiniti, BMW, and Mercedes-Benz, Genesis will play another role, emphasized Joel Ewanick, Hyundai’s senior U.S. marketing executive.

“We see Genesis as a way to sell all our cars and enhance the brand,” he explained. “It will help us sell Santa Fes, Sonatas, and Accents.”

Long seemingly invulnerable to the ups and downs of the American automotive market, Toyota is suddenly getting sheepish about future programs. For one thing, the Asian automaker will delay the opening of a new sport-utility vehicle plant it had hoped to open next year in Tupelo, Mississippi.

Meanwhile, production at the plant will be trimmed back to an initial 120,000 vehicles, rather than the annual output of 150,000 the automaker had originally planned, according to a Toyota spokesman. The company could expand production later, depending on demand, the official added.

The news comes only days after Toyota revealed that the ongoing slowdown in the U.S. new car market would almost certainly result in a decline in global profits – the first time that’s happened in nine years. As a result, Toyota is looking at ways to shift its resources to emerging markets, such as China, India, and Russia, which it needs to help prop up its sales and balance sheet.

As it now stands, Toyota is anticipating a 27 percent drop in profitability, to 1.25 trillion yen, or $12 billion – a number that other manufacturers still can only envy. Its Japanese competitor, Honda, has also predicted declining earnings of 18 percent. And archrival General Motors recently reported massive losses, largely due to the downturn in the American market.

Toyota had been counting on steady gains in the States to help it surge past GM in the global sales sweepstakes. The U.S. carmaker eked out a narrow victory in 2007, but Toyota nudged past it during the first quarter of 2008.

Toyota’s plans for the Tupelo plant – which was to build a replacement for the Highlander, an SUV/crossover – reflect a variety of factors, starting with the broad downturn in overall U.S. sales, which are expected to dip by as many as 1 million vehicles in 2008. Making matters more challenging, Toyota isn’t the only manufacturer adding capacity in North America, where there is already enough factory space to produce about 17.4 million cars, trucks, and crossovers annually – but only estimated demand for about 14 million. Honda is adding a plant, as is Kia, the downmarket brand owned by Hyundai Motor Co. And other makers, such as BMW, are expanding existing operations.

If there’s a positive side, some makers are looking to North American facilities as a way to cope with the weakened U.S. dollar. BMW, for example, is expected to replace some of its current German imports with the expanded output of its Spartanburg, South Carolina, plant.

Toyota isn’t the only maker shifting resources out of North America, long the world auto industry’s prime profit center. BMW announced, recently, that it would divert product previously earmarked for the States. And even GM is considering where to focus itself. Not many years ago, North America accounted for 75 percent of the automaker’s business. Today, that’s down to around 50 percent and, said Vice Chairman Bob Lutz, that could soon drop to just 25 percent, as demand increases in booming outlets like China, Russia, India, and other emerging markets.