Hyundai

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Hyundai

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

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