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.

RankCountry/Region2009200520001

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.

  • Bob65688581 "Give me liberty or give me death." Lots of societal choices can be phrased this way. I remember the same debate when seat belts were introduced. We went too far with seat belts - the horrible mice! We used interlocks to ensure compliance. ... ... and then we came back to a reasonable balance. So we have several options: - We can do nothing. Innocent people will continue to die. We will be passive accomplices of those deaths. Our freedom! - We can go overboard, creating more problems than we solve. We're good at this. - We can find solutions that are effective and livable. I vote for doing nothing because FREEDOM...
  • Bob65688581 "Three-row off-road" is an absurdity.
  • MRF 95 T-Bird The hideaway headlamps on these and other Ford vehicles of the era could have issues mostly vacuum related. Usually the vacuum hoses that ran to the actuators would deteriorate. The “coffee can” reservoir which was mounted in the front header was rarely an issue because it was protected from the elements. The other coffee can reservoir used for the HVAC controls and actuators and mounted under the passenger side wheel well had a tendency to rot away. I once replaced one on my 70 Mustang when I noticed that the vents were acting janky. Later model Fords like Fox bodies used a durable plastic globe shaped one. The radio on these 69-70 full-size Fords mounted on the left side of the aircraft style instrument cluster within the drivers touch probably disappointed many young people. “Mom will you change the station?” “Andy Williams is so square”.
  • MichaelBug For me, two issues in particular:1. It can be difficult for me to maintain my lane on a rainy night. Here in southeastern PA, PennDOT's lane markings aren't very reflective. They can be almost impossible to make out when wet.2. Backing out of a parking space in a lot with heavy pedestrian traffic. Oftentimes people will walk right into my blind spot even if I am creeping back with my 4-way flashers blinking. (No backup camera in my '11 Toyota Camry.)Michael B 🙂
  • Tagbert When you publish series like this, could you include links to the previous articles in the series so that we can follow through? Thank you. Edit: now I see a link embedded in the first paragraph that goes to the previous story. It wasn’t clear at first where that link went but now I understand.
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