Have you ever driven or ridden a Korean Car before? Well according to my survey, 90% of the people who answered said "yes".There are only a handful of countries around the world that have their own automobile brands and Korea is one of them. Korean car companies started to make cars very late compared to other car companies over the world, but over the past few decades the Korean Car Industry has grown. They are becoming more competitive, and a lot of Korean cars are sold around the world. Korean car industry is growing very fast and it's starting to gain reputation around the world. Still most people think of Korean cars as reasonable price cars. In my research, I would like to talk about Korean car makers.
Korean Car Industry began in 1970's. Back then they couldn't make anything by themselves. They didn't have technology, source and know-how. But they tried hard to make good cars. The Korean car history is not very long, they somehow made their way up until now and I want to introduce the brief history of Korean car makers.
According to the Website, South Korean Car Makers(Autozine.com, 2002) Hyundai Motor was established in 1967 by the Hyundai group. However, for a long period it was just producing cars based on the design supplied by Ford UK. The first self-developed model was the 74 Pony, but under the guidance of Mitsubishi. Engines also came from the Japanese design, while the styling was penned by Italdesign. The car earned Hyundai the name as the biggest Korean car maker which is still unchallenged today. The second generation Pony of 1982 marked another milestone : the first large scale export. Like the Japanese, Koreans industry was (and still is) very export-oriented. The Pony small car, benefited by the wage advantage of Korea labours, stormed the Canadian small car market in 1983. The world started to realize the rise of another Eastern car making nation. The first self-designed engine appeared in 1991, which signalled the "real" autonomy of R&D. Sales continued to grow in the whole 90's as model range expanded and quality improved. In 1998, Hyundai took over the bankrupted Kia.
Kia started producing cars in 1974 under Peugeot and Fiat's licenses. In 1986. it partnered with Ford, produced the Festiva (Pride) for Ford. The 1992 Sephia and next year's Sportage SUV reflected the independence of the company which started exporting cars under its own name. It became the third largest Korean car maker but over-expansion was hit by the Asian economy crisis in 1998. Kia bankrupted and was acquired by Hyundai in the same year.
The Daewoo story began with General Motors. In 1972, GM established a joint venture with Korean car maker Shinjin Motor Co., the company named GM Korea and is obviously GM's weapon to dominate the South Korean market. Although 50% stakes were sold to local industrial giant Daewoo Group in 1978, GM still controlled the development of cars. In fact, Daewoo did not really involve much the new car development because GM could always find some outdated cars from its Opel etc. operation to transfer to Daewoo. The Pontiac Lemans of the late 80's was one of the examples. In the light of supplying the US market to fight against the Japanese small cars, Daewoo started to produce this rebadged version of Opel Kaddet on behalf of GM. However, the project gave the Korean car maker the first taste of large volume export which became the sales policy today. It also gave Daewoo a modernized plant with 170,000 annual capacity. GM quit in 1992 as it sold the remaining stakes to Daewoo group. As the US influence evacuated, Daewoo started to develop its own cars. That called for setting up R&D centers in Europe and subcontractting many development projects to overseas consultants. With the help from the Western experts, the small car Lanos was born in 1995. Next year, Daewoo invested into Poland's FSO, forming a joint venture which eventually produces the Matiz mini car. In 1998, SUV maker Ssangyong bankrupted and was received by Daewoo. Daewoo group used to have variety of business in different fields. In 1999, the group got into financial crisis due to the over-expansion during the previous few years, thus resulted in selling nearly all business but the car division. The latter also faced the same fate in next year. Ssangyong spinned off from the troubled Daewoo in year 2000.
The history of Ssangyong started in 1954 when Hadongwahn Motor was founded. It was later renamed to Dong-A Motor. The company became a manufacturer of commercial trucks, fire engines and other special purpose vehicles during the 70s. In the early 80s, Dong-A acquired SUV maker Keowha, which made 4WD offroaders licensed from Jeep. The merged company was renamed to Ssangyong in 1986 and started concentrating on SUVs. The turning point was in 1991, when it signed an agreement with Mercedes for transferring its engine technology and helped it developing light commercial vehicles. This is why you can see many Ssangyong cars and SUVs are equipped with Mercedes straight-sixes. The Musso of 1993 and Korando of 1996 successfully opened the door of global SUV market for Ssangyong. Later, Mercedes even helped Ssangyong developed its first passenger car - the Chairman luxurious sedan. To produce the Mercedes engines, Ssangyong built its second plant in Changwon. The aggressive expansion led to its bankruptcy during the Asian financial crisis in 1998. The company was bought by Daewoo and its SUVs and Chairman were rebadged as Daewoo. The name Ssangyong disappeared for a while until 2000, when Daewoo itself went into receivership. Ssangyong, with its stronger basis in SUV business and the better prospect of global SUV market, received support from its creditors and spun off from Daewoo.
In year 2000, Hyundai seeked a strategic partnership with DaimlerChrsyler - the new owner of Mitsubishi - by selling 10% stakes to it. This should secure the survival of the Korean no. 1. Somewhat like Japan's Mitsubishi and Subaru, Hyundai Motor is part of the giant Hyundai group whose variety of business monopolies the economy of S. Korea. The car division is also proud to be the Korea no. 1 car maker, easily beating the second place Daewoo. The drastic economy recession in 1998 dropped its domestic demand shortly, but in fact the benefit to Hyundai was more than loss, since the no. 3 car maker Kia bankrupted and was then absorbed by the no. 1. This further strengthen Hyundai's position as the strongest Korean car maker. After the becoming one company with Hyundai, Kia kept up with the industry and now both domestic and export sales are increasing. Senior executive vice president Mark Juhn, Kia's chief operating officer said,
"Kia continues to show that world class quality and real value pricing are not mutually exclusive. Despite a difficult global automotive industry environment, we are continuing to post solid gains. The success of the Sorento and the New Carens in the domestic market bode well for their contribution to Kia's global sales in the remainder of the year."
Together with Hyundai Motor, Kia Motors is committed to becoming one of the global top 5 automakers by 2010. To this end, the company is focusing all its resources on the improvement of business profitability, quality competitiveness, and productivity.
| Year | 2001 | 2000 | 1999 |
| Production | 2,548,393 | 2,545,958 | 2,040,185 |
| Sales | 2,652,412 | 2,533,243 | 2,127,685 |
The Asian economic crisis hit Korean car makers the most as domestic demand dropped severely in 1998. Next year, the weakened Korean dollar and wage cut helped a super strong growth rarely seen. Of course the products are also very important - within 2 years, Daewoo replaced its whole line-up with several world-class models - Lanos, Nubira, Leganza and Matiz. The latter is especially competitive in the worldwide market. As you can see, troubled by the financial problems, sales have gone down to 502,701 units from previous year,972,247 units.
| Year | 2001 | 2000 | 1999 |
| Production | 522,375 | 997,444 | 1,123,974 |
| Sales | 502,701 | 972,247 | 1,060,379 |
Ssangyong is Korea's off-roaders specialist. Thanks to the technology transferred from Mercedes-Benz, it developed some good off-roaders from zero within a few years. Also don' forget the Chairman luxurious sedan, Korea's first and still the best luxurious car. Once acquired by Daewoo in 1998, Ssangyong has been back to independent since 2000 after its owner bankrupted. Now run by creditors, Ssangyong has regained stable sales and production. However, for a company this small, finding a stronger owner is just a matter of time.
| Year | 2001 | 2000 | 1999 |
| Production | 125,026 | - | - |
| Sales | 125,440 | - | - |
According to Professor Korea Post article from World Wide Web(http://koreapost.co.kr/2000_05/yoondk.htm) entering into the global firece competition, the major automakers in the world work out startegies to cooperate with one another and are evotedd to research and development of the new technologies in order to meet the customer's demands which are associated with environmental protection and vehicle safety. Accordingly the Korean automobile Industry is being rapidly restructured toward the globalization , and making constant efforts to boost its international competitiveness through the managerial reform, the realization of economies of scale, parts sharing and modularization, etc. As a result of them, the Korean automobiles are gaining good reputations from the international media and the vehicle assessment organizations over the world. Moveover, the exports have gradually increased through the active marketing strategies. The Korean automobile industry is now in its critical stage for survival and growth in the intense competition with the world leading automakers, and we are sure of our potential to get through it. Recent announcement on the merger of U.S. General Motors (GM) and Italy's biggest car maker Fiat is shocking, indeed, for the Korean automobile industry. It is shocking not because the merger means the birth of a company capable of manufacturing 10 million cars a year (GM's 8.10 million and Fiat's 2.60 million). What invites our attention is about the stark reality in which a major car manufacturer like Fiat is doomed to collapse and what the fate of our auto industry would be like. Fiat's production capacity is close to that of all Korean auto companies combined together. The Wall Street Journal has predicted only "Big 3" could remain survived while the Business Week forecast only six companies with the annual production capacity of 5 million cars each could remain alive in the 2010s. Those predictions are being transformed into reality. Even at this moment, the Korean auto companies are exerting all their efforts to develop new and advanced technologies in order to reach the high standard that customers demand of them.
Korea Times.(2001)Korean cars sales Retrieved September 28, 2002 from World Wide Web: http://www.hankooki.com
Hyundai Motor World.(2001-2002)Global News Retrieved October 3, 2002 from World Wide Web: http://www.hyundai-motor.com/eng/sitemap/index.html
Autonews.(2002)Statistics on Sales and Production Retrieved September 24, 2002 from World Wide Web: http://www.autonewsdatacenter.com
Korea Automotive Research Institute.(2001)Automotive Market Data Retrieved October 4, 2002 from World Wide Web: http://kari.hmc.co.kr/
Kia Motors.(2001)Kia Vision Retrieved October 5, 2002 from World Wide Web: http://www.kmcir.com/kia_e/a03.htm
Ssangyong Motors.(2002)Ssangyong cars Retrieved September 29, 2002 from World Wide Web: http://www.ssytrade.co.kr/flame_company.htm
Daewoo Motors.(2002)Daewoo history Retrieved September 29, 2002 from World Wide Web: http://www.dm.co.kr/index.php
Korea Auto Industries Coop Association.(2001)Automaker Industry Retrieved September 30, 2002 from World Wide Web: http://www.kaica.or.kr/8.htm
Autozine.(2002)South Korean Car Makers Retrieved October 4, 2002 from World Wide Web: http://autozine.kyul.net/index.html
Kia Motors America.(2002)Kia Sales Retrieved September 27, 2002 from World Wide Web: http://biz.yahoo.com/prnews/021001/latu114_1.html
Professor Youn Duk Gyu of Hanyang Univ.(2002)Big 3 Retrieved October 1, 2002 from World Wide Web: http://koreapost.co.kr/2000_05/yoondk.htm