An Introductory Research on the Strategic Trajectory of the South Korean Automobile Industry: Analysing the Evolving Foundation of Design Competitiveness in Historical Perspective

Résumé:

 In considering the past decade of the world automobile industry, South Korea has proven the most outstanding growth in global presence. In 2012, the gross production recorded nearly 7 million, and this positioned the nation as one of the global top 5 producers. The absolute dominance of Hyundai Motor Corporation after its acquisition of Kia in 1998 has been distinctive throughout the 2000s, but South Korea experienced a lasting oligopolistic structure beforehand. My historical research will investigate the continuity and the discontinuity in the Korean automobile industry from the specific perspective of design and the consequential innovation in product and process management. Throughout the industrial history of 50 years, the Koreans have never been alone; Americans and Japanese were involved, but most interestingly, Europeans have moulded a critical characteristic of the Korean competitiveness blooming today, viz. car design. This remarkably lasting Euro-Korean connexion in history should be clarified in my research.

Texte complet:

An Introductory Research on the Strategic Trajectory of the South Korean Automobile Industry: Analysing the Evolving Foundation of Design Competitiveness in Historical Perspective

In considering the past decade of the world automobile industry, South Korea has proven the most outstanding growth in global presence. In 2012, the gross production recorded nearly 7 million, and this positioned the nation as one of the global top 5 producers. The absolute dominance of Hyundai Motor Corporation after its acquisition of Kia in 1998 has been distinctive throughout the 2000s, but South Korea experienced a lasting oligopolistic structure beforehand.

Despite its relatively short history, i.e. approximately 50 years since the 1960s, the Koreans, more specifically Hyundai, made an early attempt of developing its own flagship model in the 1970s. They comprehended very well that the inevitable backwardness would require considerable time, and more significantly investment cost, of learning to gain technological independence in R&D and manufacturing. The following three industrial characteristics surfaced from the early stage of development: firstly, car design, viz. stressing more “exterior identifiableness” rather than interior sophistication, was recognised as a strategic resource that would make up (somewhat temporarily) for technological underdevelopment. This induced the second, that is, their approach to European designers for product development. Since the 1970s, the Koreans have involved with a wide array of collaborations with Europeans, and at the same time, a considerable number of Korean car designers were sent to Britain, i.e. Royal College of Art, since the beginning of the 1980s to absorb European tastes and trends.

The third characteristic has been their concern in depth with branding. Some niches as a “breathing space” in the segment of small cars always existed in the North American market, whereas the sustainable positioning in the major European territories was virtually impossible for the Koreans until a decade ago. Heavy marketing was a key solution to achieve global sales through the typical appeal of price competitiveness, and whether it was executed or not in operation, the Koreans’ primary concern has placed constantly upon effective branding.

This paper will provide a research note on my introductory analysis on the Korean manufacturers’ historical evolution in global competitiveness from the industrial birth to today. In regard to the essential perspectives of R&D and production, this study focuses upon strategic design management. As a latecomer in the world automobile industry, the Koreans have not been an isolated case: throughout their stage of takeoff in the 1970s and the 1980s, technology transfers from the Japanese such as Mitsubishi Motor Corporation, formed the technological backbone in production, and more remarkably, their product design was led by Europeans such as Giorgetto Giugiaro of Italia. Then, during the 1990s, Hyundai and Kia attempted to achieve more or less “stand-alone-R&D” in both technology and design, and this resulted in a series of trials and errors in global product development. The learning phase, including the financial crisis in 1998 and the consequential industrial restructuring, e.g. the merge of Hyundai and Kia, was not in vain though: the Korean manufacturers could pinpoint their drawbacks in global competitiveness and commit to tackling the problems. In tandem with corporate-level endeavour of quality improvement, the Koreans refocus upon design management and branding. And again, they call for European resources from the middle of the 2000s.
In January 2013, Hyundai announced that Herr Peter Schreyer will be a CEO in charge of the product development of both Hyundai and Kia. In the industrial history of South Korea, it was a sensational decision that positioned a “foreigner” (who is not even a manager but a “designer”) as the head of a corporation. Was this really sensational? History would answer no. Four decades ago in the 1970s, design was an only method that would allow the Koreans to provide their products with an identity. Then three decades ago in the 1980s, design was an only countermeasure that would compensate their technological backwardness in both domestic and global market. Now a couple of decades ago in the 1990s, design became a vital element for marketing. Constantly, design has been the most essential corporate resource for the survival and growth of the Korean car manufacturers.

My historical research will investigate the continuity and the discontinuity in the Korean automobile industry from the specific perspective of design and the consequential innovation in product and process management. Throughout the industrial history of 50 years, the Koreans have never been alone; Americans and Japanese were involved, but most interestingly, Europeans have moulded a critical characteristic of the Korean competitiveness blooming today, viz. car design. This remarkably lasting Euro-Korean connexion in history should be clarified; and my study would contribute to the further enrichment of scholarly knowledge in GERPISA.