The Challenge of Korean Automobile Industry Gearing up for Global Management as a Path Finder

초록

In 2009 sales volume of Korean automobile market increase 19.5% to 1.45 million thanks to policy measure to boost demand and stabilization of financial market. Meanwhile, automakers Introduced new models and the competitive structure of Korean auto industry had been changed. In the turmoil of global economic crisis, Korean auto maker Hyundai, quickly adapted business strategy to the changing market environments. In 2009 Hyundai made the decision to focus on emerging markets and on small cars. On the other hand, in the U.S. Hyundai introduced the Hyundai Assurance Program and the Gas Lock program. At last Hyundai achieved 11.7% increase of sales and posted an operating profit rate of 7% in 2009. In spite of it drastic jump, Korean automakers have several challenges. First, Korean carmakers have to learn from the recall of millions of Toyotas. Hyundai also could be caught in the trap of “unmanaged growth” and “complexity” problem. Second, Win-win relationship also would be needed to support the quality management and R&D investment of suppliers. Third, Hyundai was led by a hierarchical structure and the “can do” leadership. However, creative culture could facilitate flexible organizations and localized strategy in the context of globalization. Fourth, Hyundai’s car had been undervalued compared with their competing models. To breakthrough this phenomenon, Hyundai have to boost Hyundai’s brand image dramatically. Fifth, Hyundai occupied a very similar position as its brother carmaker, Kia. Hyundai and Kia occupied almost the same zones in prices and engines. Although they pushed a certain number of cars from the same platform to be profitable, they wanted to be totally separate brands in the market.

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