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 Repu blic of Korea's automobile industry. The basic framework for the analy sis is provided by the theory of competitive advantage. Rather than co mpetitive 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 structur e, the nature of the product and production process, as well as govern ment policies are stressed. Whilst government intervention successfull y restructured industry to create an export market for automobiles in the mid-1980s, export growth planned for autoparts may not occur in th e 1990s. Exports of small, low cost passenger cars was achieved in the North American market because the Korean government could intervene i n the production process in several ways with the objective of reducin g cost. Price was central to consumer preference in the mass-produced car market. In contrast, high-technology autopart markets are differen tiated by technology and quality. Government intervention necessary to establish research and development facilities to promote autopart exp orts may not overcome the limitations of the autopart corporate struct ure, the general lack of finance and skilled scientists in the Republi c of Korea, as well as the impacts of 'democratisation' on industrial policy-making.