One year after the introduction of the XG300 to the United States, Hyundai provided a new engine to their premium sedan in 2002 and renamed it the XG350. A larger 3.5-liter Sigma V-6 engine generated roughly the same amount of horsepower than the previous 3.0-liter powerplant, torque production is enhanced for the Hyundai four-door sedan. Along with up to 216 pound-feet of torque, the 2002 XG350 also boasted the ability to run on regular unleaded gasoline. Between the engine and the front-wheel drive system of the Hyundai XG350, a five-speed automatic transmission with Shiftronic provided a smooth power delivery. Acceleration for the sedan was rated in the lower 8-second range.
Another change between the XG300 and XG350 is the standard inclusion of 16-inch alloy wheels for 2002. Four-wheel disc brakes with anti-lock braking system and traction control provided extra control to the Hyundai XG350. Inside, the base version of the premium sedan was equipped with conveniences such as automatic temperature control, front and side airbags, power mirrors, cruise control as well as an audio system with CD player. A 2002 Hyundai XG350 L model included with more lavish touches such as a sunroof. The instrument cluster of the Hyundai XG350 underwent a revise in 2003 making it easier for the driver to read. In 2004, the Hyundai XG350 styling was updated with a new grille, retouched headlights and revised rear deck lid.
Other enhancements performed to the XG350 for 2004 included larger front brake rotors and a standard electrochromic rearview mirror. On the 2005 version of the high-end Hyundai XG350L sedan, an eight-disc CD changer was added to the standard features list. For the 2006 model year, Hyundai completely redesigned their premium sedan under the Azera persona.