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Hyundai

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Hyundai Hyundai Presentation Transcript

  • South Korea & Auto Industry
    • Brief of South Korea
      • The car market in South Korea is too small that automakers like HMC & Kia get sustained.
      • These firms targeted global markets t attain the economies of scale to majorly remain competitive in the automobile industry.
      • The country has a sizeable workforce who drive innovation in everything by having all the knowledge.
      • Wages are also lower in South Korean market than in many advanced economies.
      • High saving rate and also has inward foreign investment
      • Intense rivalry in the domestic auto industry that makes the car makers to do continuous improvement.
    • Government steps
      • Devised the system of close government/ business ties including
        • Directed credit
        • Import restrictions
        • Sponsorship of specific industries
      • Promoted the import of raw materials and technology
      • (at the expense of consumer goods)
      • Encouraged savings and investment over consumption
    • Productions Factors in automotive industry -
      • Cost effective Labor
      • High Technology
      • Knowledge workers
      • Capital
      • Theory of comparative advantage ( David Ricardo in 19 th century) - means that countries should specialize and export those goods in which they have a relative advantage compared to other countries.
      • Factor Proportion Theory (Eli Hecksher) – holds that nations specialize in the production of goods and services whose factors of production they hold in abundance.