Korea Week: A Look At Their Auto Industry

Bertel Schmitt
by Bertel Schmitt
korea week a look at their auto industry

South Korea is a small country. With 48.6 million people crammed into an area roughly the size of Indiana, South Korea has one of the world’s highest population densities. It also has an amazing auto industry. Like Germany in the 50s, and Japan in the 60s, Korea was the laughing stock of the 80s. That arrogant grin has frozen. South Korea is a feared competitor the world over. Let’s have a look at the feisty little runt.


China 13,790,9945,708,4212,069,0692

Japan 7,934,51610,799,65910,140,7963

United States 5,711,82311,946,65312,799,8574

Germany 5,209,8535,757,7105,526,6155

South Korea 3,512,9163,699,3503,114,998

The South Korean automobile industry is the fifth largest in the world in terms of production volume and the sixth largest in terms of export volume. The South Korean new car domestic market is good for slightly above a million units a year. The South Korean car industry produced 3.5m units last year, down from 4m units in 2008. What are they doing with all those cars? They export them. South Korea has one of the world’s highest export to domestic consumption rate. Japan exported about half its production last year. Germany a third. South Korea exports about 70 percent of its production.

These numbers hide the true power of the South Korean car industry. Just like Japan, South Korea is a big exporter of car factories. South Korea’s powerhouse Hyundai-Kia sold 4.6m units worldwide in 2009, a million more than the total South Korean production. According to South Korea’s Chosun Ilbo reports, South Korea’s five automobile companies sold 5.44m units worldwide in 2009. Again, only 3.5m units were produced at home.

Just like Germany, Korea was not totally unscathed by carmageddon, just like Germany, South Korea survived it with minor bruises. A crisis is always an opportunity for those who make it through it unharmed and with cash in the pocket. Contrast the dark blue (Germany) and the light blue (South Korea) line with the USA (green) and Japan (purple.) Ouch! Germany and South Korea were not as exposed o the toxic U.S. market as Japan was and is. But Korea’s Hyundai definitely captured more of the rebounding U.S. market with an attractive line-up and clever marketing. 400,000 of the 500,000 cars Hyundai sells in the U.S.A. are made in the U.S.A.

And while you are at it, have a look at the red line: China.

China is one of the reasons why Germany and South Korea got through carmageddon alright: Both countries export a lot to China and maintain a heavy presence in the world’s largest auto market. Shanghai (SAIC) has GM and Volkswagen. Beijing (BAIC) has Mercedes and Hyundai. If you step out of the Beijing airport, you’d think all of China is full of Hyundais, because most of Beijing’s taxi fleet is. If you step out of the Shanghai airport, you’d think China is still riding around in old Santanas.

Worldwide sales 2009Hyundai-Kia4,641,756GM Daewoo578,758Renault Samsung189,813Ssangyong34,936Total:5,445,263

If all South Korean automakers except Hyundai-Kia would close, the world would not even notice. Actually, it doesn’t already. You will only find Hyundai-Kia in OICA’s World ranking of manufacturers, the other South Korean makers are rolled into their parents’ numbers. Ssanyong was an experiment by SAIC. It ended in a fiery disaster.

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  • Twotone Twotone on Nov 16, 2010

    That's even more impressive when you divide the auto production by population for cars produced per capita: China 0.01 Japan 0.06 USA 0.02 Germany 0.06 Korea 0.07

  • Brandloyalty Brandloyalty on Nov 16, 2010

    Maybe building cars is an old, dirty, resource-intensive industry that advanced countries would prefer to move beyond. That's a sweeping generalization, but perhaps it's part of what's going on here.

  • Kcflyer on one hand it at least wont have dirty intake valves like Honda's entire lineup of direct injection ice vehicles. on the other hand a CRV offers more room, more range, faster fueling and lower price, hmm
  • Tassos BTW I thought this silly thing was always called the "Wienermobile".
  • Tassos I have a first cousin with same first and last name as my own, 17 years my junior even tho he is the son of my father's older brother, who has a summer home in the same country I do, and has bought a local A3 5-door hatch kinds thing, quite old by now.Last year he told me the thing broke down and he had to do major major repairs, replace the whole engine and other stuff, and had to rent a car for two weeks in a touristy location, and amazingly he paid more for the rental ( Euro1,500, or $1,650-$1,700) than for all the repairs, which of course were not done at the dealer (I doubt there was a dealer there anyway)
  • Tassos VW's EV program losses have already been horrific, and with (guess, Caveman!) the Berlin-Brandenburg Gigafactory growing by leaps and bounds, the future was already quite grim for VW and the VW Group.THis shutdown will not be so temporary.The German Government may have to reach in its deep pockets, no matter how much it hates to spend $, and bail it out."too big to fail"?
  • Billccm I had a 1980 TC3 Horizon and that car was as reliable as the sun. Underappreciated for sure.