An Introduction to the Korean Automobile Industry

Abstract

The Korean automobile industry in the 1990s carries significant importance for the Korean economy as a whole. The automobile industry showed unprecedent development through the mid-1990s until it reached critical crises in 1997. It was the largest industry in the manufacturing sector and recorded won 17,745 billion (USD 20.9 billion) of total sales in 1994. The automobile component industry ranked fifth with sales of won 9367 billion (USD 11.02 billion) in the same year.¹ It is also considered an important industry since many other substantial industries with various vertical and horizontal links depend on it; Steel, ceramics, chemicals, electronics, machinery and textiles are some examples.² In addition, the automobile manufacturing industry recorded 22.8 per cent of total GDP and 16.9 per cent of total employment of the manufacturing industry in 1994. Subcontractors and affiliated industries comprise a significantly large portion of the whole economy.³ The contribution of the industry to national exports is also remarkable. Total exports of the automobile industry recorded 978,450 units and USD 9.4 billion in 1995. This represents 7.5 per cent of total exports.