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South Korean car-makers have long been prominent players and competitors in the global car market.
With domestic production of about four million cars a year, Korea’s auto industry has emerged not only as a key pillar of the nation’s economy, but also one of the world’s most important producers.
The image of the Korean industry during its early days as churning out cheap products has long disappeared as the nation’s leading carmakers such as Hyundai Motor, Kia Motor, GM Daewoo Auto & Technology, Renault Samsung as well as SsangYong Motor carve out market shares around the world.
Indeed, in the push to boost quality, the Koreans are starting to catch up with their Japanese rivals.
Nevertheless, the Korean car-makers still face considerable challenges in their global drive. In particular this includes developing their brands.
Spearheading the moves is South Korean market leader Hyundai, which together with its offshoot Kia control more than 70 per cent of the domestic market and aims to rank among the world’s top five car manufacturers by 2010.
In the last few years, Hyundai has been turning in export figures and unnerving its western competitors as it emerges as one of the car industry’s global players.
But while Hyundai has a growing presence in fast-paced car markets such as in India or China, it continues to face a tough battle in other fiercely competitive markets.
Of concern to Hyundai has been the recent success of its domestic rival GM Daewoo, which with more than 200,000 vehicles exported for the first time more cars to Europe during the first half of the year.
Daewoo also profits from the US car-maker General Motors’ Chevrolet brand being sold abroad among Daewoo models.
As a result, brand development forms a key part of Hyundai’s global market expansion strategy.
“We have moved beyond the stage of selling cheap cars”, said Ahn Kun Hee, who the Hyundai vice-president responsible for foreign sales. But still some customers hesitate to buy Hyundai cars because the name is not yet accepted as for example Toyota, said Ahn. A similar challenge faces the company in the US market, he said.
The Korean car-makers have not only boosted their exports, but as a consequence of the exchange rate have, like the Japanese, moved to strengthen their manufacturing presence in the markets they compete in.
In the US, Hyundai is building a second engine factory at its production base in Alabama, which began operating two years ago.
In April, Hyundai opened a one billion-euro-plant in the Czech city of Nosovice. This is about 80km away from where Kia operates a plant in the town of Zilina in Slovakia.
