• Madani Sahari

SOUTH KOREA CASE STUDY - Achieving competitiveness on global stage

Over the last few decades, we have seen the constant economic domination of only a handful of nations, which have set the benchmark of national success for all the world to follow.

Recent global events have suggested that although this economic might is still present, even the world superpowers cannot afford to be complacent about shift global trends.

Browsing through the numerous online forums and comment feeds, it seems that Malaysia's small market will forever hold us back from competing among the global players.

An online discussion about our national OEMs attempting to reach global competitiveness is often received with cynicism, and there is no way Malaysia's small industry can compete with the large car producing nations.

The best case study for a zero-to-hero story in the automotive history is none other than the globalisation of the South Korean automotive industry.

Most importantly, it is a classic example of an industry that emerged in the shadow of much more advanced players in the US, Europe and Japan.

The Korean automotive industry can be traced back to the 1960s, more than 20 years before Malaysia started the national car project in 1983.

It was a time when Korea was a poor country recovering from a divisive war in the previous decade.

The first phase of Korea's industry development saw The Shinjin Motor Company (now Daewoo) assembling knocked down CKD packs through a partnership with with is Japanese counterpart Toyota.

Interestingly, the Korean government placed a 25 year total ban on imported vehicles, which gave the then fledging domestic player time to mature.

The ban was only lifted in 1980, although high tariffs were still imposed on imported vehicles at the time.

In the 1990s, the South Korean auto industry began the gradual process of liberalisation, in order to spur its next phase of development - to increase competitiveness among their domestic industry players.

As the playing fields were equalised between local and foreign players, the next two decades saw the rapid emergence of Hyundai Motor group, the world's third largest carmaker today.

There are three things that make the Korean automotive industry an interesting case study.

Firstly, it is a nation that rose from poverty and spurred wealth through a technology based industry - seen in the immense talent and capability coming out of South Korea today.

Secondly, Korea built a strong foundation of assemblers and vendors, and embraced the liberalization model early on to spur innovation within its borders.

Third and most importantly, it is a nation that adapted very quickly to change. Koreans were quick to adapt to the third industrial revolution, by ensuring that their citizens had easy access to computers and the internet, allowing technology penetration within their societies to move at a rapid pace.

This created a society that was prepared to face a technological upsurge to face the challenges of the global export markets.

In conclusion, in our pursuit to participate in the global economy, it all starts with the belief that nobody is too small to start.

The key component is our adaptiveness to global disruptive trends.

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