Automotive strategies in Korea, Malaysia and Thailand
---- A good example of different approaches to creating competitive advantage
Prepared by: Jingting Wang__________
Advisor: Dr Barry Unger_ _____
Date: Oct. 20 2012
This paper will analyze the automotive industry in three countries, Korea, Thailand and Malaysia. Each country will be analyzed through the aspects of goals of their strategy, the long and short term orientation and the methods used to apply the strategy in order to adapt to the global competition and economy development. After the analysis, according to different countries’ unique situation, corresponding recommendations to the strategies of each country will be given.
1. Korea's auto industry development and marketing recommendations Korean auto industry only spends 40 years to achieve the mature automotive industry while other developed countries would spend hundred years. Its achievements have attracted worldwide attention. 1.1 Analysis of developing strategies of Korean auto industry in different phrases Examining the history of Korean automobile industry development, according to their different development strategies and development characteristics, can be divided into four stages: 1.1.1The first phase (1962-1973): parts assembly stage.
In 1962, Korean government was in the first five-year economic development plans, determining SKD as the development orientation of the domestic auto industry. After 1963, the Korean government improved the localization rate of parts and automotive industries, transferred SKD assemble into CKD independent production. 1.1.2 The second phase (1974-1982): component localization and production system restructuring stage. To improve the level of localization of the Korea Automobile Manufacturers, the government developed the automotive industry breeding program and clear automotive industry localization goal to develop a specific product localization schedule in order to help the localization of raw materials imports give exemptions and other preferential treatment. In 1979, affected by the oil crisis, the Korean auto industry at home and abroad rapidly deteriorat. In order to get rid of the crisis, the Korean government took a strong policy to the automobile industry in production structure adjustment and concentrated to form the backbone enterprises of a number of automobile productions and parts professional supporting enterprises. 1.1.3 The third phase (1983-1997): production expansion, and the scale of export growth stage. As the economic boom began to rise, with the expansion of production scale, increased investment and the improvement of production conditions, the international competitiveness of the Korean car significantly improved steadily. Thing needs to be noted at this stage is that the Korean government adapted to the new situation of production. Korea's automobile production system designed to encourage competition, improve the efficiency of the adjustment, and completely lifted. 1.1.4 The fourth phase (1997-present): adjust and mature stages. Faced with Asian financial crisis, the Korean car reorganization made some drastic adjustments. First, a number of loss-making enterprises mergers. Followed by the major car companies began to appear non-strategic facilities and assets divest non-core business to lose weight for enterprises to strengthen competitiveness in the domestic and international auto market. Finally, car prices and extended warranty expanded exports a foothold in the international market. 1.2 Recommendations on Korean automobile industry development Looking throughout the 40 years automotive industry development of Korea, we could draw the following recommendation: • Government industrial policy has played a very important role in the Korean automobile development. The proposed export liberalization policy...