The Korean automobile industry is today the fifth largest in the world in terms of production volume, and the sixth largest in terms of export volume, although South Korea had a relatively late start. While its initial operations were merely the assembling of parts imported from Japan and the United States, Korea is today among the most advanced automobile-producing countries in the world. Annual domestic output exceeded one million units in 1988. In the 1990s, the industry manufactured numerous in-house models, demonstrating not only its capabilities in terms of design, performance, and technology, but also signalling its coming of age.With total auto registration exceeding 15 million units, one car owned by virtually every household, Korea entered into a mature phase.
Korean New Vehicle Registration (in Thousand)
The outstanding quality and acclaimed performance of Korean automobiles are widely recognized not only by local consumers but also in overseas markets such as U.S., Europe, etc., greatly contributing to the record high exports of 2.6 million units last year.
Korean Auto Export
South Korea exports 41 % of its total motor vehicle production, with roughly 35 % of the exports going to the U.S. South Korea is the 6th largest automobile market, however imports makeup less than 1 % of motor vehicle trade in the domestic market. Prior to 1987, foreign auto imports were prohibited and Japanese automotive imports were not permitted until 1999. South Korea's automotive industry has also experienced restructuring. In 1999, Hyundai acquired Kia and Asia Motors, and sold 10 % of its equity to DaimlerChrysler in 2000; Daewoo purchased 52 % equity in Ssanyong in 1998; and GM purchased 42 % equity of Daewoo; and in 2000, French automaker Renault purchased Samsung Motors.
In the years to come, auto maker's technological competitiveness around environment-friendly vehicles, such as hybrids and fuel cell cars, will paly a critical role in deciding its future. Thus, not only individual car maker's efforts to sharpen its competitive edge but also government support for R&D activities, on top of pursuing FTA's and cooperation with trade partners, is greatly needed.
