Korea’s Automobile Industry is the fifth largest in the manufacture of cars and its parts merely imported from Japan and U.S. Today, Korea is also one of the most highly developed in production of automobiles. By 1980s, the ability of Korea in auto industry has increased more than what they have expected. Producing 1.1 million units was really a great achievement, preferably in South Korea.
Since economic boosted Korea for the past years, this made them partly one of the influential countries here in Asia. Its government supported the growth of this industry and other programs created to build a strong and developed industrial base, which created opportunities particularly in business and other industries in the country. Not only in automobile industry that Korea has expertise, but also in the field of electronics, particularly cell phone manufacturing, etc.
Over the past decade, Korea has proved its ability in the production, manufacturing and exporting of automobile way back in 1980. The industry’s growth has expanded five times of what the Korean’s expected. The question is, why or why not make the investment in the Korean automobile industry? Korea, presently divided into North Korea and South Korea. A small country, yet one of the most civilized one. Because of their advanced technology as of Singapore and Japan, this made them one of the most progressive countries here in Asia.
Automobile industry in Korea has been stable in the past years as founded in charts. However, competition is also stable. When the three big companies namely Hyundai Motor Co., Kia Motors, and GM Daewoo of auto industry in Korea were launched, a growing number of competitors immediately followed. Korea’s growing industry changed the lifestyle of the Koreans, workers regret a jobless revival, everyone protest of increasing land and housing prices but their wages became similar to western countries, labour unions were also banned.
South Korea’s investment in China in 2004, mainly steel and cars, passed Japan’s investment. Korean’s believed that they have an advantage in China because they do not suffer from post war hostilities than of companies in Japan. With the growing number of jobs, Korea experienced increased number of labourers and employment suppleness. They even hired workers from other countries just to increase the number of employees that they need in a particular company.
Korea is now facing an economic stability and government financial situation. They continue to improve their work, and this means a continued financial problems. Korea has its access to potential and capital markets for their products are renowned globally. Their importers were also acclaimed to be among of the leading countries in Asia and in the world like U.S and Japan, which are also their primary manufacturers. Despite these problems, Korea still emerged as one of the leading countries in Asia in terms of investments and exports. For the next two years, the automobile industry planned to increase their sales from 28% to 50%.
Korea proved that it is worth to make an investment with them in automobile industry, for they are financially stable; they had stable workers and are supported by their government policies. Business opportunities also increased due to their implementation of the “Import Diversification Program”, which pushed Korean firms to transfer purchases from Japan to purchases from U.S. this gave Korea a great opportunity in the business world, especially in automobile industry.
One of the dangers of investing in Korea’s auto industry is its competition to other neighboring countries that also manufactures automobile like China, which they say that they would enter the world market. It is also said that China produced over a million automobiles in 2004, which was really a great start. Another danger is the constantly changing of the country is laboring policies.
Korean government controlled the formation of labour unions, which is why their policies are always changing. Because Korea’s economy grew rapidly, costs of necessities increased rapidly. They need more persons to work in their companies, because jobs increased as their economy grew larger and wider. Sure, they have access in other countries like U.S and Philippines; their only problem is the number of workers that would try their luck in working in the country.
Though Korea claims that their automobile industry aims a great success, we believed that it is not that worthy to invest there because of China’s entering in the world market, the restrictions of labour unions and the attempts of the labourers to conduct company strikes. Maybe, investors will increase if they still improve the status of their growing business. It is not that bad to invest in the auto industry of Korea, only if China would not be a great competitor. By 2020, industry tycoons do agree that China could produce a mass of 20 million cars yearly.
This proves that China could really make it ahead of Korea in the auto industry. China is also one of the most exporters of cars and cell phone units, which range from 27-30% than of Korea that only gained 26-28% in the past years. If Korea could only improve their way of treating exporters, they would probably get as much customers like of China. Korea’s only edge in China is that their currency, the won, improved a lot better for it threatened the cost of U.S dollars as seen in charts and in newspapers. We’re not saying that investing in Korea now is bad, only that the competition is not that healthy than of their previous years.
Savada, Andrea Matles and William Shaw. “South Korea: A Country Study”. (1990). 17 June 2007. http://countrystudies.us/south-korea/50.htm.
Brooke, James. “The New York Times”. 18 October 2005. 17 June 2007.
Jones, Heather S. “Business America”. 31 August 1987. 17 June 2007. http://findarticles.com/p/articles/mi_m1052/is_v10/ai_5151117.
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