My first trip through Russia was during the dark days of the old, Evil Empire. Flying into Moscow’s airport was a chilling experience, with few locals other than heavily armed, and exceedingly unfriendly soldiers watching your every move. Moscow’s roads were largely empty, but for the odd Lada and Moskvitch, almost certainly being driven by a senior government official or favored party apparatchik.

Those were the days, after all, when the idea of a consumer economy meant a single Pepsi machine located near the Kremlin – and a single paper cup that would be shared by everyone on the long line waiting for the machine to dispense its syrupy goodness.

These days, if you have the money, you can find plenty of Cristal champagne at the discos and fancy restaurants that seemingly pop up like mushrooms along Moscow’s increasingly crowded streets.

Forget the Moskvitch, and expect some big changes to Lada, which has formed a partnership with Nissan/Renault. Today’s increasingly affluent Russian consumers have access to virtually every automotive brand imaginable, and more are coming. The Nissan/Renault/Lada deal will result in a huge increase in vehicle available, as will a new General Motors plant. Though the country’s population is but a fraction of that in the world’s other boom markets, China and India, it seems like everyone wants a production presence on Russian soil.

The results are paying off, sales numbers for the first four months of 2008 indicate. Foreign brands are up 49 percent, with GM Chevrolet posting a 53 percent increase. Hyundai, a late entrant, scored a triple-digit, 108 percent gain, leading the charge by Asian makers. Among Europeans, Renault topped the sales charts and reported a 26 percent gain. Though still smaller, Peugeot also saw sales more than double against year-earlier numbers, while Volkswagen sales rose nearly 50 percent.

So, let’s see if I have this right: wWhen I first flew into Moscow, most comrades were walking or taking the bus. Now they’re buying cars and driving one of the world’s most vibrant consumer economies. Back here, in the U.S., we’re watching sales plunge and worried about the sinking economy. Care to remind me who won the Cold War?

When the South Korean carmaker Hyundai recently announced plans to introduce a Microsoft-based navigation and communications system into its cars, it underscored the dramatic transformation of today’s automobiles. While they may remain, at their most fundamental, mechanical devices, the modern car has become an electronic center, with digital technology controlling everything from the engine to the backseat entertainment system.

Indeed, the biggest area of growth is in information and entertainment technology, sometimes dubbed “infotainment” or, if you prefer, "telematics.” These days, many cars feature more high-tech features than your typical home or office, and the trend seems all but certain to continue.

That’s why a new study by ABI Research forecasts that just navigation devices and systems alone will generate sales of $62 billion by 2012. "Despite disappointing sales levels in the first quarter of 2008 and profit warnings issued by TomTom, Tele Atlas and SiRF, the navigation market still faces a bright future," Dominique Bonte, ABI Research principal analyst, told the trade publication, Telematics Update. "The current decrease in sales has to be seen as a logical reaction following the extraordinary sales growth during the fourth quarter of 2007, especially in the United States."

Good news for Hyundai, Toyota, BMW, and Ford (its new SYNC system, in a Lincoln Navigator, shown above)? Not necessarily. Millions of Americans are forgoing the built-in systems these manufacturers sell – often at prices running to $2,000 – in favor of portable navi units, some of which are available for less than $200. There are dedicated navigation systems, like TomTom's, and now even gaming devices and phones with built-in GPS hardware.

So what’s a carmaker to do? It could depend on two things, acknowledges Alan Hall, a spokesman for Ford Motor Co.: either drop prices or add significant functionality. (Or both, we’d add.) It’s a growing bit of conventional wisdom that factory-equipped navi systems will have to drop to perhaps $500 to $700 to keep consumers ticking off that box when they order a new car.

Ford’s SYNC is commanding around $1,900 in the 2009 Escape crossover, yet sales are booming. That’s because the Microsoft-programmed system features not just navigation, but a multifunction audio package, with a 10GB hard drive and an incredibly intuitive voice interface. Want to find the nearest burger joint while driving cross-country? Just say, “I’m hungry.”

But as analysts note, such technology isn’t the exclusive property of automakers like Ford, at least not for long. Traffic and even weather, as well as detailed points-of-interest lists and voice control, are all showing up on portable devices.

The pot of gold is huge. The question is, who will be able to claim it?

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.”

The Korean carmaker Hyundai Motor Co. has inked an expansive deal with Microsoft that will bring a new generation of in-car electronic “infotainment” technology to the cars, trucks, and crossovers sold under the Hyundai and Kia brands.

The voice-controlled technology will integrate a wide range of features, including in-car navigation, audio, Internet access, and other electronic systems. And unlike conventional in-car electronics, the technology will be primarily software, rather than hardware-based, meaning updates and additional services will be able to be programmed into vehicles once they are already on the road.

The Hyundai-Microsoft system will be an advanced version of technology already on the road in a number of Ford Motor Co. vehicles and known by the name SYNC.

Until recently, Hyundai had lagged behind many of its competitors in terms of in-car electronic systems, such as on-board navigation, but “Customers tell us they really want this technology,” noted Joel Ewanick, the South Korean automaker’s U.S. marketing chief. Hyundai had already begun adding navi and other technologies, but believes that the integrated system, with its voice control, will make it easier for consumers to use – and thus increase the “take rate,” the number of consumers willing to pay a premium for such technology.

"These new systems will redefine consumer experiences in the car," said Martin Thall, general manager of Microsoft's Automotive Business Unit, during a ceremony at Hyundai headquarters in Seoul.

The new technology will use the Microsoft Auto software platform and should make its debut on a product bound for the North American market in 2010.

Hyundai announced it will spend $165 million over the next five years to expand the availability of in-car technology in Hyundai- and Kia-branded vehicles.

Along with the new infotainment deal, Microsoft and Hyundai – along with the Institute for Information Technology Advancement – announced they will create a new automotive innovation center designed to promote opportunities for Korean software and device vendors in the global market.