SAY BYE TO HYUNDAI AND HI TO KOREAN AUTOPARTS - RESTRUCTURING THE KOREAN AUTOMOBILE-INDUSTRY IN THE 1990S

This article examines the industrial restructuring process of the Republic of Korea's automobile industry. The basic framework for the analysis is provided by the theory of competitive advantage. Rather than competitive advantage being a function of place, it is a result of a set of conditions constructed within a place. Factors which are essential to the production system; world market conditions, corporate structure, the nature of the product and production process, as well as government policies are stressed. Whilst government intervention successfully restructured industry to create an export market for automobiles in the mid-1980s, export growth planned for autoparts may not occur in the 1990s. Exports of small, low cost passenger cars was achieved in the North American market because the Korean government could intervene in the production process in several ways with the objective of reducing cost. Price was central to consumer preference in the mass-produced car market. In contrast, high-technology autopart markets are differentiated by technology and quality. Government intervention necessary to establish research and development facilities to promote autopart exports may not overcome the limitations of the autopart corporate structure, the general lack of finance and skilled scientists in the Republic of Korea, as well as the impacts of 'democratisation' on industrial policy-making.