This study discusses the issues, problems, and prospects of the domestic automobile industry, which underwent major restructuring after the Asian financial crisis in 1997.
After Hyundai Motor Company merged completely with Kia Motor Company, the Hyundai-Kia Automotive Group became the world's tenth largest automaker based on vehicle production. While Renault Samsung Motors still needs to find solutions for its company’s advancement, there is a high possibility that Hyundai and Daewoo will lead the Korean automobile market, and will have a great effect on both the domestic and foreign automobile industry. The merger of Mercedes Benz, a German automobile manufacturer, and Crysler, an American automobile manufacturer, was one of the largest mergers ever, and at the same time, Volkswagen AG of Germany finalized the full takeover of Rolls-Royce Motor Cars Limited, outbidding BMW. As the demand in emerging Asian markets failed to keep up with the production, merger activities and the alliance of automobile manufaturers will likely to increase in the future, due to current trends in the automobile industry.
As the market has been oversaturated with cars, companies are expected to undertake reorganizations. For instance, luxury automakers such as Mercedes Benz, Crysler, BMW, and the Rover Company, a British car manufaturing company, are starting to adopt innovations in mass production. Domestic companies are also focusing on finding a way to raise competitiveness in the international market. Hyundai’s two auto units—Hyundai Motor and Kia Motors—expect to fulfill their goals: becoming the world’s tenth largest automobile manufacturer, competing with Samsung Motors, and setting the outline of the product lines. Hyundai-Kia needs to raise competitiveness in the global market by maximizing the benefits of enlarging the corporation and the synergy created by it.
According to this research, Hyundai-Kia are facing tasks including integrating platforms, combining auto part manufacturers, and undertaking job restructuring. In order to maximize the ‘economy of scale’, first the company must integrate platforms regarding similar models, and combine affiliates that produce automotive parts as soon as possible. Furthermore, job restructuring seems inevitable due to complete organizational integration.
Hyundai’s merger with Kia helped South Korea to recover from the Asian financial crisis, and become a chance to develop. As the Korean automobile industry pushed its own nation into a financial crisis, more than anything, it was what was mostly damaged, and perhaps, Kia was the main reason. However, it seems that the global market and the means to handle Kia crisis is about to change. Recently, analysts are claiming that a strong yen will last for a considerable amount of time, and many say the global economy is likely to face a new period of “3-lows” (low growth, low price, and low yen). At this point, exports of Korean-made cars are considered to be potentially lucrative and a breakthrough in the development of the automobile industry.
구조재편기 자동차산업의 과제와 진로(The issues and prospects of the automobile industry during the era of restructuring)
|Series Title; No||KIET 산업경제|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Industry and Technology < Manufacturing|