Automobile Industry: Korean and Japanese Business Practices

Topics: Automotive industry, Japan, General Motors Pages: 7 (2356 words) Published: December 18, 2011
Table of contents

1. Abstract
2. Introduction
3. Evolution of Japanese and Korean automobile industry
4. Current Market Position of Korean and Japanese Automobile Companies 5. Changing trends
6. Conclusion
7. References

Automobile industry: Korean and Japanese Business Practices

As the automobile industry has become increasingly global, the rapidly growing industry in Asia and particularly in Korea and Japan has attracted our attention. Korea is now recognized as a prospective growth region for the automobile industry in the twenty-first century, with its potential to be the world's largest automobile producer. The automobile industry in Japan has reached maturity and has almost no growth potential. However, although Korea has seen remarkable industrialization and economic growth from the 1960s onwards, steady progress is not always guaranteed – as seen during the current crisis – and this holds equally true in the automobile industry. The South Korean automobile industry has an overproduction capacity of nearly 1 million cars annually. During the economic crisis, most of the automobile manufacturers reduced production. Now there are signs that the financial order of the Asian region is starting to stabilize and recover. Japanese, European, and United States automobile manufacturers have started to increase production in the region again. Sooner or later, it is expected that the automobile industry in Korea will be revived. With this in mind, a decision was taken to focus on the Korean automobile industry and compare with Japanese automobile industry.

Now it is unbelievable that one of the poorest countries in Asia during the lifetime of one generation will become an industrial power of global significance. In those days it seemed a great achievement by making Kia in 1952, the first Korean ... bicycle, and the left lane on the streets of Korean cities was designed exclusively for horse-drawn transport - bullock teams. Less than half a century, and the same Kia has become one of the leading automobile companies in the world, and Korea in terms of car production into fifth place in the world. The most attractive feature of Korean cars was a combination of low price with acceptable quality. For the car around in the same class but manufactured in Japan the buyer would pay a much larger amount. Thus, Korean automobile manufacturers nowadays do represent a serious threat to their Japanese colleagues in a long run.

Evolution of Japanese and Korean automobile industry
In 1909, Japanese auto industry finished the invention of car and since then they can make their own cars (Xue Yan Inspiration from Japanese Auto Industry, 2010). But the domestic auto industry was in depression and in 1918; Japanese government gave subsidy to the people who buy the domestic automobiles. Because of this policy, Japan auto industry became much better than before but still had a large deficit. In 1936, Japan established a policy that forbade produce foreign cars. But it was not useful enough for the whole industry. The real development time of Japanese auto industry appeared after the Second World War. United Nations did not allow Japanese manufacturers to produce aviation equipment, so many of the technical staffs turned to auto industry. In this period, Japanese auto industry mastered the advanced manufacturing technology. In 1970, Japan started to export cars to other countries. It only took 25 years for Japan to go global. But in 2000, because of the decrease of population and labor in Japan, the domestic sales volume dropped significantly. While the sales volume in other countries increased a lot. In 1980, Japan produced 11.04 million cars; that number was greater than the number of cars produced in the United States (Siyun Lin, Japanese Economic Plan, 2003). Japan became the world’s first automobile superpower. The main auto manufacturers in Japan are Toyota, Honda, Nissan,...

References: 1. Xue Yan, “Inspiration from Japanese Auto Industry”, 2010
2. Siyun Lin, “Japanese Economic Plan”, 2003
3. Xinlong Ji, “The Development of Korean Auto Industry”, 2011
4. Longye Song, “Korean Auto Industry and Kwangju Experience”, 2007
5. Bunkley Nick, "G.M. Says Toyota Has Lead in Global Sales Race", The New York Times, 2010
6. Benjamin Daniel K., “Voluntary Export Restraints on Automobiles” PERC Reports: Volume 17, No. 3. Property & Environment Research Center. 2008
7. Koichi Uetake, "Japan faces uphill battle", The Daily Yomiur
8. Lee Jun Bok,”Hyundai 's at the top of its game; Company posts record profits for 2009 and is set to raise its brand recognition even more”, The Straits Times, “GROWTH OF S. KOREAN AUTO INDUSTRY TO SLOW IN 2012: GOV 'T REPORT”, 2010
9. Mike Ramsey and Doron Levin, “Toyota’s U.S. Dealers May Lose $2.47 Billion a Month”, 2007
10. Michael McDermott, “Korean auto producers: Asia 's next major force in Europe”, 2009
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