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Project 1 Asian
Leading auto countries : Korea and Japan
Name :
Young M. Yoo
----- CONTENTS ----- I.
Introduction II. Asian leading auto countries :
Korea and Japan II-1. Japan automobile industry
. Production
. Domestic Sales
. Exports
. Car market share by category II-2. Korean automobile industry
. Introduction .
Automobile industry’s developing step .
Production .
Domestic sales and exports III.
Conclusion : the outlook for Asian Car Industry .
Asian car industry . The
world car industry I. Introduction The world car industry is one of the
largest and most influential in the world. The current recess in world demand has spread
alarm throughout a once profitable industry. Now,
the major issues facing the industry are the subjects of major new studies, which examines
the fundamental trends in the evolution of car market over the last decade, and considers
its prospects for survival in the 21st century.
There
is no doubt that the Asian car industry – especially Korea and Japan – plays
very important in the world car market. An
increasing number of governments, are according it the status of a key or spearhead
industry, to be preserved and – if possible – rejuvenated at all costs. ‘In the face of growing exports from Korea
and Japan, many governments hitherto more or less committed to the principles of free
trade in manufactured goods are also moving to protect the car firms within their
borders.’ Now even Germany, the major car manufacturing country in the West to set
ceiling on Japan’s import penetration, has followed the line set earlier in the
decade by the USA. Elsewhere in the world,
many developing – country’s governments are becoming increasingly involved in
the car industry too, seeing it as a crucial leading sector capable of throwing off
linkages to a range of other domestic suppliers and of taking a leading role in the
industrialisation process in the economy at large. II. Asian leading auto countries :
Korea and Japan II-1. Japan automobile industry Japan
maintained its rank as the world’s second largest producer of motor vehicles
following the United States. The
country’s total domestic output of motor vehicles accounted for about 20 % of world
production for the year.
Production Car
production in Japan showed a year-on-year gain of 6.1%
in 1997, tattling 10.97 million units. Despite
a downturn in domestic sales, overall production scored a second consecutive year of
growth, benefiting from a favourable trend in overall exports prompted in part by the
strong performance of the world’s major markets excepting Asia, where demand plunged
due to the currency crisis, and in part by the depreciation of the yen thoughout the year. Car production
Domestic Sales New
motor vehicle registrations dropped to 5% in 1997, amounting to only 6.72 million units
and marking the first decline in domestic sales in four years. Demand in the first quarter of the year surged
enormously, driven by buyers seeking to beat the increase in the consumption Tax that took effect on April 1st. Throughout the rest of the year, the market
remained locked in a slump due to the effects
of a number of negative factors, including the backrush from the afore-mentioned rush-in
demand, the end of a special cut in income
tax, and reduced consumer confidence due to uncertainty in the overall economy. The result was a slump in demand for the year as a
whole.
Exports Following a long downtrend, motor
exports in 1997 jumped by 22 .7 % to 4, 553, 168 units, marking their first year – on
– year growth in seven years. This growth is attributable to a
number of factors, including an economic recovery or the continuation of favourable
economic conditions in Europe, North America, and other export destinations, as well as
the increased demand for sport-utility vehicles and other models that are not produced by
Japan’s automakers in overseas plants.
Car Market Share by category In Japan, engine size is the main criterion for dividing cars into categories. Engine displace- ment for standard cars is 2000cc or
more, for small cars 661 – 2000 cc, and for mini cars 600cc and under. One key characteristic of the Japanese
car market is the high proportion represented by the small and minicar sectors, that is,
cars with engine displacement under 2000cc. A
second characteristic of the market is standard cars’ high share of the imported car
market in contrast to their low share of the total markets.
A third characteristic is the increasing presence of RV models in the car market.
Source
: Japan Automobile Manufacture Association II-2.
Korean Automobile Industry
Introduction
The growth of
Korean car exports in the 1980s owes a considerable amount to govement intervention and
careful planning over the end of 1970. Across
a wide range of industries, Korean exports have grown exceptionally rapidly since the
1980s. Electronic consumer goods, cameras and
so on. It would appear that, as far as cars
are concerned, Korea’s share of world trade has merely followed the path illuminated
by other industries.
Korean
automobile industry has grown rapidly to the major maker in Asia and in the world since
1980s. Their domestic market has grown. There
is no doubt that Korea car market is one of the largest car markets. It would appear that, as far as cars are
concerned, Korea’s share of world trade – Electronic consumer goods, cameras and
so on – has merely followed the path illuminated by other industries. Since
Korea is faced with economic crisis, it seems that exports and production were reduced but
it would be expected to increase in 1999.
History of Automobile Industry’s
developing
1. 1981 – 1985 : Preferring for
the growth (Beginning Step )
2. 1986 – 1988 : Growing of the exports
à. First exported to North America.
3. 1989 – 1993 : Popularising of car in domestic market
à
Rapid growth of domestic sales
4. 1994 – 1997 : Maturing in the
domestic market
à
growth of the domestic sale slowly
à
rapidly growth of exports Production Since
Asian countries were faced with their economic crisis, most production scale in all
industries has decreased. In 1998, it was
caused by reduction of domestic markets and car companies’ strikes against lay-off. But
export markets have increased.
Domestic sales and exports As I mentioned in the previous
paragraph, in last year , there were several economic problems. As a result, domestic
sales were unexpectedly decreased by minus forty eight percentage. But in exports, the
market has little bit increased due to the
exchange rate. However, in 1999, it seems
that domestic sales and exports are expected to increase On the other hand, the structure of car demand is changing that
expects is more than domestic sales since 1998.
III. Conclusion : The outlook for Asian Car Industry
Asian car industry : More than ten years have passed since
Japanese automakers moved beyond simply supplying knock-down kits for local assembly,
which commenced in the 1960s, and began to be actively involved in contributing to the
growth of an Asian motor vehicle industry. Local
production in Asia has steadily expanded. Since
guided by a new concept centred on meeting the needs of rapidly emerging middle –
income families by locally producing cars to specifically satisfy local requirements. At
the same time that Japanese automakers are accelerating the pace of their localization
drive in Asia, they are making comprehensive efforts to contribute to regional economics. They have invested millions of dollars and
provided jobs for around 50, 000 local personal in sales and production. In addition, they are transferring technological
expertise through joint winters, technical agreements and the training of local personnel
and providing crucial support for peripheral industries such as metals and electronics. The world car industry : The fashion of car
industry is changing to unite among the big car companies from the end of 1997. But, what
an upturn in new car sales in the major markets will not change, however, are the
fundamentals of the industry as it approaches the end of the twentieth century. There is no question that the Asian
companies’ competitiveness will continue to overhang every investment project
undertaken in the world market. Indeed,
from the end of 1997, Korean and Japanese car
companies started a round of price cutting. Bibliography . Hudson , Schamp (1995) : Towards a New Map of Automobile
Manufacturing
in Europe? Springer. . Korean automobile association
magazines : ‘KAMA’ (1997 – 1998) . Japan auto magazine (1997. 12) . Stuart Sinclair (1983) : The World car : the future of the
automobile
industry, Euromonitor Publications. |