The Development and Internationalization of the South Korean Motor Industry: the European Dimension

Abstract

In 1967 Hyundai Motor Company was established. Kia Motors and Daewoo Motors produced their first passenger cars in the mid-1970s. Until the late 1980s, Hyundai was synonymous with Korean auto exports, virtually all of which were destined for the USA. During the 1990s, the Korean auto industry has made remarkable progress on four fronts. It has developed its domestic market, diversified its export markets, reduced its dependency on foreign technology, and increased the proportion of own-brand sales. Today Korea is the fifth largest auto producing nation in the world. Korea's ‘big three’ have employed an export-based international business strategy, but they are now increasingly switiching to local production. It is thus increasingly likely that ‘transplants’ will be established in the EU. Korean auto components suppliers rely almost exclusively on the ‘big three’ and would have strong incentive to ‘follow the leader’.