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

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Benefits compared with investment in China, Japan and other countries in the Asian region. The global auto market is tending to move to Northeast Asia after Europe and the USA, and the attraction of the auto parts market environment in Korea has been increasingly improved for potential investors. More importantly, in the ever-improving Korean auto parts market environment, the hierarchical transaction practice of auto manufacturers in Korea has been gradually eased and rationalized to establish fair transaction relationships. Furthermore, the big manufacturers’ sales have continued their upward trend, thus sustaining the stable growth of the auto parts industry, while sales of foreign manufacturers operating or planning to operate in Korea have been on the rise. Since Korea is situated in the hub of Northeast Asia, which has the greatest growth potential in the world, it provides better benefits for making inroads into the Chinese market or the Southeast region. Besides, it effectively provides qualified engineering manpower, and a good environment for developing electronic devices within a short time, compared with most other countries, thanks to the availability of Korea’s highly advanced IT technology. Comparing Korea s auto parts investment environment with China, the advantages and disadvantages can be described as follows: Advantages: Infrastructure for parts and materials, manufacturing and quality control, export marketing capability, IT and related industries, competitiveness in technologies and quality. Highly-qualified workforce High productivity and quick adaptability to changes Abundant demand for components and material Perfect test-bed for new products and services for other Asian markets Well-developed infrastructure World-class ICT infrastructure Better protection of intellectual property Disadvantages: Relatively high labor cost-structure Relatively smaller domestic market Relatively confrontational labor-management relations Forecasted competitiveness in auto parts vis-a-vis Japan. Korea’s auto parts-related
Korea’s Auto Industry - Today and Tomorrow Offering Investors a Future-Oriented Optimal Investment Environment technologies, which have been steadily improved, are expected to reach a similar level with Japan, except for specific parts, by the year 2005. However a significant gap still exists in the area of core technologies necessary for developing future intelligent cars. Brakes ABS Axle Steering Products Transmission High- Technology for future Vehicles Products Telematics Hybrid Fuel batteries Intelligent Electrical devices 42V Low pollution engine Steer by Wire Parts design Production lines Source: KDB, 2003 (one Japanese yen = 100 won) Production technology Quality competitiveness 95 100 100 100 98 95 100 100 100 98 95 100 100 100 98 90 100 100 95 96 85 90 90 85 87 85 95 95 95 92 50 32 32 - 38 37 36 35 - 36 25 90 90 60 66 65 45 70 60 60 85 85 95 85 87 50 10 50 - 36 Korea, an optimal destination for investment in auto parts. In line with Northeast Asia emerging as the hub of the world auto industry, the geographical benefits of this region are increasingly being highlighted. Japan, as a global economic power, has secured world-class auto manufacturing technology on the back of the world’s second-largest auto market, while China continues to shatter records for growth rate of both production and demand. With its explosive potential in demand, China has surfaced as the contest stage of the global auto market and industry. Korea has grown to become the world’s sixth-largest automaker within a short 31 I time thanks to significant growth of its export-driven industry, and it is still growing. Asia’s Big-3 has become the center of the world’s auto industry with their benefits and greatest market 30 Overall Korea’s Auto Industry - Today and Tomorrow
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Korea's Auto Industry - Today and Tomorrow - Invest Korea

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