South Korean Automotive Industry
Jason Choi
Student ID: 910687406
Professor Simeon
IBUS 690_01
Automotive Industry in South Korea
I. Introduction (Sector Analysis) A. Country Background
Known as one of the Four Asian Tigers, South Korea, officially known as the Republic of South Korea has become a major force in today’s globalized economy. With a population of just around fifty million people, South Korea has a thriving economy, which is Asia’s fourth largest economy with a GDP (nominal) of $1.151 trillion (ranked 15th) (CIA, 2009). South Korea’s rapidly growing economy is evident when observing how its real GDP has expanded by 8 percent annually, from $2.7 Billion in 1962 to $230 Billion in 1989. Most of South Korea’s early economic development is attributed towards emphasizing most of their labor-intensive work in the industrial sectors. Here, many large conglomerate known as “chaebols” started and made their impression on the world. Factories in Seoul and the Gyeonggi Province contributed to nearly half of the country’s employment, with 2.1 million factory workers back during the economic development times (Green, 1992). Throughout the 1960’s – 1980’s, South Korea’s major contributing sectors to their economy were their shipbuilding, mining, construction, armaments, and their automobile industry. A good sense of a country’s industrial level can be measured from their automotive industry due to that fact the automotive industry is a prime example of generating added value through economies of scale for the country (Lee, 2011). South Korea’s automotive industry is fifth largest in the world in terms of production and sixth largest in terms of exportation in 2010.
B. Sector Background
The origins of the Korean automobile industry have ties with the development of parts manufacturing and service stations as a result of Japanese colonial policy before World War II (Kim, C.K., Lee, C.H. 1987). Furthermore, the development of South Korea’s automobile industry
Student ID: 910687406
Professor Simeon
IBUS 690_01
Automotive Industry in South Korea
I. Introduction (Sector Analysis) A. Country Background
Known as one of the Four Asian Tigers, South Korea, officially known as the Republic of South Korea has become a major force in today’s globalized economy. With a population of just around fifty million people, South Korea has a thriving economy, which is Asia’s fourth largest economy with a GDP (nominal) of $1.151 trillion (ranked 15th) (CIA, 2009). South Korea’s rapidly growing economy is evident when observing how its real GDP has expanded by 8 percent annually, from $2.7 Billion in 1962 to $230 Billion in 1989. Most of South Korea’s early economic development is attributed towards emphasizing most of their labor-intensive work in the industrial sectors. Here, many large conglomerate known as “chaebols” started and made their impression on the world. Factories in Seoul and the Gyeonggi Province contributed to nearly half of the country’s employment, with 2.1 million factory workers back during the economic development times (Green, 1992). Throughout the 1960’s – 1980’s, South Korea’s major contributing sectors to their economy were their shipbuilding, mining, construction, armaments, and their automobile industry. A good sense of a country’s industrial level can be measured from their automotive industry due to that fact the automotive industry is a prime example of generating added value through economies of scale for the country (Lee, 2011). South Korea’s automotive industry is fifth largest in the world in terms of production and sixth largest in terms of exportation in 2010.
B. Sector Background
The origins of the Korean automobile industry have ties with the development of parts manufacturing and service stations as a result of Japanese colonial policy before World War II (Kim, C.K., Lee, C.H. 1987). Furthermore, the development of South Korea’s automobile industry