Hyundai Motors is creating a huge splash on the automobile industry. They made an aggressive marketing blitz last year to take advantage of the weak Korean currency. The blitz included a string of promotional packages including its “assurance program”, where a buyer can return their cars and cancel their loans without hurting their credit ratings.

And as a result, the company is stepping up its sales pitch with its toughest rivals, Toyota, who incidentally was suffering one of the world’s worst public relations as far as the auto industry is concerned.

The campaign took off last February 7 at the Super Bowl in America. The said advertising campaign will run eight multi-million dollar commercials in CBS Sports, the broadcaster of the 2010 Super Bowl. The aim of the launch is to kick off its 160 million dollar campaign promoting its re-engineered Sonata family sedan.

Meanwhile the car model, Sonata, is actually built in Alabama and obviously would give a good run for Toyota’s Camry, Honda’s Accord, and Ford’s Fusion. The strategy was simple. During an industry slump on 2009, they delivered results – that allowed them to sell 8.3% more units that translates to about 435,000 vehicles. It doubled its net profit to a record 2.5 billion dollar last year, where global market share also rose by 5.2%.

Hyundai seems to be keeping its momentum going. And they seem poised to give giants a good run for their money. But they cannot be too over-confident, and must learn lessons from the Toyota fiasco. Otherwise, history will repeat itself and it would be so hard for them to clean up the mess. They must remember that its not always about promotion and advertising, but quality too.

Not so long ago, Toyota Motors Corporation Akio Toyoda has apologized for his company’s debacle surrounding flaws with various car models. It was a gallant stand, but is it worth praising for someone to do what he or she is required to ethically do?

Obviously not.

The Japanese car maker has taken responsibility for their company’s mistakes, which is an indication of a good and ethical leadership. They didn’t shift blame to others nor did they use passive voice such as “mistakes were made”, or simply deny that there was problem.

Apologies seems to be the hallmarks of many failures and we have seen enough of these – from business executives down to political leaders. But then, apologies are just merely a few words strung together. The utterance is obviously necessary. But they are not sufficient. They hardly constitute restitution for the millions of their customers who bought thinking accelerator pedal and brakes would work properly.

The current fiasco has generated a whole lot of rumors, where one of the most impending was the company knew about the defect since mid last year but still decided to release it. But we don’t have the facts yet. It is not too soon either to rightfully expect Toyota will do everything to protect the rights of it’s consumers, as to improve design and demonstrate to shareholders that people are the company’s first concern.

In the long run, the best way is still to find ways how to repair company’s image and boost value of its stock that has dropped 20% over the last two weeks. After all, it never too late to right a wrong, or at the safest, better late than never.

It seems Toyota’s big recall problem is getting worse as days pass by. After the stoppage of selling for eight of its models that were involved in the recall for sticking accelerator pedal, the latest blow came when Consumer Reports suspended its recommendation of the models involved. Over the years, CR has lavished recommendation on Toyota’s cars and trucks in large part because they have been very, very reliable.

In essence, does this mean that Toyota’s quality is not worth recommending? In U.S. where quality is there cornerstone, many people are thinking twice about it. Although, CR still recommended 27 of its 32 models before, today, that number is now down to 15.

Well, if they are not convinced that it is not bad enough, there is an even bigger threat to the Japanese carmakers image. The company is no stranger to recalls, but to its credit Toyota has handled them swiftly and kept customers happy whenever the same type of issue rose.

But sure, this is a different story. Now, they are under fire, as the Energy and Commerce Committee Chairman Henry Waxman said his panel plans a hearing come the second month of the year. They want to look upon whether Toyota knew about the matter and when and if the carmaker moved responded quickly with a remedy. Whatever it may be, still, the news from Consumer Reports is a body blow, but the government hearings could be worse.

What members of the Congress were wondering is if Toyota dragged its feet while sudden acceleration accidents continued to happen. Representative Bart Stupak went so far as saying; “Incidents of sticking accelerators have been ongoing with Toyota vehicles for up to a decade and have led to a disproportionate number of deaths,”

But the good thing, consumers didn’t felt irritated by this issue. Adam Simms, owner of Tyota of Sunnyvale said, “He has almost 100 employees taking calls and he says so long as everything is explained, his customers have been OK with all that has happened.”

Whatever is this, we still know that Toyota must fixed this brouhaha.

GMs decision of not selling the company has after all, created a lot of tensions most especially to one of its divisions, Opel. It has angered many of Opel’s workers and the European government as well. Armin Schild, the leader of union and Opel board member blasted the company for mismanagement.

Furthermore, he added that by not selling it, it would possess a huge danger and threat to the Opel Brand. GM will still be pursuing those same company policies that have already led to the firm’s declination in the last 20 years – not many changes, pressure on employees, and the government but in a more intense manner.

Although they could always ask for support from the government that promised the same to Magna, analysts sees that it actually does not contain what one would have wanted to expect. Sure, they could always come up with a restructuring plan that can only be good on the papers.

When it happens, GM is speaking of 10,000 jobs that will be eliminated. In contrast, Magna spoke with a similar number but only, it avoided factory closures and layoffs, as job elimination can also be achieved by not replacing workers who retire from the company. Magna’s strategy foresaw spreading the job losses among all Opel facilities.

The fault doesn’t lie in the management of GM but the last 20 years have shown they were putting so much focus to profits than the number of vehicles sold. And as such, they have paid less attention to developing innovative, more competitive products. This was evident in Opel, they never fully took advantage of the know-how of their engineers nor did they use the brand’s full potential. Instead, the focus of saving so much money ruined the brand and created so much negative impact.

Overall, some at GM were surely aware that collaborating business with Magna represented an excellent opportunity. But it’s not for nothing that the entire workforce and the governments of a number of European countries are angry with them.

Amidst the troubled automaker industry, Ford was able to come back. In a tremendous fashion, as the company reported nearly $1 billion in profits while paying its own debt and adding a good amount of market share.

On November 2, the company reported a $997 million third quarter profit, adding profits to gains in market share and improvement in overall quality since CEO Allan Mulally took over last September 2006. The profit is a $1.2 billion turnaround from the third quarter last year, where they also generated $1 billion in cash and paying $2 billion in debts.

Amazing, isn’t it? “Ford is making tremendous progress,” Mulally said on a conference call. “Our transformation is working really well.”

The company has since then become far stronger than its rivals – General Motors and Chrysler, as they have also gained tremendous market share at about 16%. Although they still have a debt-full of load, the estimated $38 billion in debt was reduced to $23 billion presently.

They have made a great leap with their strategy of reducing approximately $4.6 billion in cost this year. Also, they have made tremendous progress with consumers too as they added $100 million to automotive revenue. The bottom line is simple – productivity gains, lower retiree costs and a drop in operational cost all contributed to its emergence.

The real meat though is the $1.9 billion in pretax profit by getting better pricing. CFO Lewis Booth said that their plants have been so disciplines producing only fewer cars to the company doesn’t need to deep down discounts if it cannot be sold.

But a lot of work still needs to be done. Despite a strong quarter, Ford still lost about $1.3 billion this year.

Despite the strong quarter, Ford has still lost $1.3 billion so far this year. But they are becoming liquid with 23.8 billion in cash, up from 2 billion from second quarter. This was partly achieved by issuing 565 million dollars in new stocks for the quarter.

1998 is a significant year in China. AIA moved back in Shanghai as one of their many foreign operations today. It marked the very first year of the return of foreign insurance companies in China after a long absence in the country when they were rejected from operating some five decades ago. Since then, other companies followed in – Cigna, AXA, Allianz and several other aiming to tap the nearly 1.5 billion people with few options for life insurance.

However, many companies have overblown their research and development. Their optimism turned out a failure as life insurance premiums represent just 2.2% of China’s gross domestic product against Taiwan’s 13.6% and Hong Kong’s 9.9%. Just June of this year, foreign companies only took 4.7% of premiums paid in China. Their revenues were on the rise but still it was a huge step backwards in share.

The problem was simple, foreign companies underestimated the strength of China’s current insurance companies such as China Life and Ping An. China’s foreign insurers policy is stricter, as they don’t have a nationwide license. They are require to get separate permit for every city and province they want to do business with.

Moreover, there is a problem with joint ventures as all foreign insurers must need to work with local partners. Essentially, there is no room for a holistic growth for the foreigners as it needs to be divided among local investors. For example, Canada’s Manulife is teamed up with oil company Sinochem, while United Kingdom’s Aviva partnered with food company Cofco.

A further concern for foreign entrants is the undeveloped state of China’s capital markets. The bond market is small. Normally, it would take one to have an EXTREMELY good connections to penetrate the market. In general, it will be hard for foreigners competing against their domestic rivals. But by slowly eating up until a respectable amount of pie is consumer, it will be possible only in the longer term. For now it might not be the most perfect alternative.

Western car manufacturers are still in the process of recovering the recession in the United States. As such, they put their focus in mainland Asia’s biggest market, China that resulted in an increase of 78% in business compared in about the same month last year.

Car sales are running at about 14 million yearly, while before it was only roughly about 9 million. So did you see that figure? It only indicates one thing – tremendous increase!

But still, doing business in China gives Western executives a whole lot of headache. It still contains plenty of obstacles as several events have shown. Apart from trade disputes and cultures, one of the biggest issues Western manufacturers is the Intellectual Property Rights issues. Although IPO itself contain scary language, the paragraph in China is even scarier that includes:

“Impediments to the flow of foreign exchange capital payments and receipts”

Companies are barred from withdrawing their profits from China and are forced to reinvest in the country.

“Additional regulation of rechargeable batteries, which may reduce our ability to sell in certain markets”

Batteries are essential for cars to run. Perhaps China wants it free or at the very least lowering down the cost or providing longer warranty. This regulation protects the home team.

“Longer payment cycles and potential difficulties in collecting accounts receivable”

More than 30 days payment terms. So it would be very difficult for companies to run back working capital.

The Chinese car market is a free for all market. There are over 90 local and foreign brands that offer about 400 different car models. Topping the list of the manufacturers is Volkswagen (1st). And oh, did I ever forget to mention the stolen designs? I am sure that there are a lot of it in the country!