Korea's Auto Industry - Today and Tomorrow - Invest Korea

Korea’s Auto Industry - Today and Tomorrow
Offering Investors a Future-Oriented Optimal Investment Environment
When it comes to General Motors, the largest foreign investor operating in Korea, the priorities
they considered before determining their investment were, first, the scale of the market (one of
Asia’s three largest markets and one of the world’s four fastest-growing markets); and secondly,
Korea’s excellent technologies; and thirdly, Koreans’ productivity. Other reasons include
Korea’s strategic geographical location and globalization. GM appeared to have made a
decision on investment in Korea based on its market-oriented strategy, taking into account the
benefits offered by Korea such as high technologies and productivity, domestic consumption
and a huge potential neighboring market.
In view of the aforementioned reasons for advancing into Korean market by foreign auto
manufacturers, decisive factors appear to be advancing into the Korean market as well as the
Chinese and Japanese markets, and low-labor costs, availability of highly-skilled workforce,
and the incentives for specialized technologies, government support, raw material supply and
exemption from import restriction regulations.
10
5
0
Securing
raw material
Using technical
manpower
Specialization
of Technology
Low labor cost Penetration into
market
Advance into
Chinese/Japan
market)
Avoidance of
import restriction
Government
support
Foreign-invested businesses marketing trends. Eighty percent of locally manufactured
products were sold in the domestic market, and very few of them were shipped to their home
countries. Thus their investments were mainly aimed at the Korean market (71.2%)
80
60
40
20
0
2.7
71.2
5.6
3.7
3.7
13.6
4.1
5.1
4.4
15.6
5.6 7.9
5.6
Korean market Asian market Domestic market Other market
2.5
3.1
3.3
Others
28 I 2 9 Korea’s Auto Industry - Today and Tomorrow