South Korean car makers

CONTENTS

Hyundai

 
Subsidiary Kia
Owned by DaimlerChrysler  - 10% 
Mitsubishi  - 4.1%
Introduction Hyundai and its subsidiary Kia is currently the 7th largest car group in the world, just after GM, Ford, Toyota, Renault-Nissan, Volkswagen and DaimlerChrysler. It is also the fastest rising one and a fearsome rival to Western car makers. Benefited by low labour cost in Korea and the government's policy to favour industry, Hyundai and Kia can price their cars much cheaper than Western and Japanese cars. At the same time, the company raised its engineering and quality standard quickly in recent years, getting closer and closer to world standard.


Sales figure 2005 group sales: 3,715,095 units
2004 group sales: 3.36 million units

2005 Hyundai sales: 2,533,695 units
2004 Hyundai sales: 2.1 million units

2006 Kia sales: 1,340,000 units
2005 Kia sales: 1,105,841 units
2004 Kia sales: 1,011,429 units
2003 Kia sales: 858,697 units
Location Hyundai main plant : Ulsan
Kia plants : Asan, Sohari
6 R&D centers in Korea, 1 in Detroit, 1 in Frankfurt and 1 in Japan.
Overseas design studio in LA.
Brief History Hyundai

Hyundai Motor was established in 1967 by the Hyundai group. However, for a long period it was just producing cars based on the design supplied by Ford UK. The first self-developed model was the ’74 Pony, but under the guidance of Mitsubishi. Engines also came from the Japanese design, while the styling was penned by Italdesign. The car earned Hyundai the name as the biggest Korean car maker which is still unchallenged today. 

The second generation Pony of 1982 marked another milestone : the first large scale export. Like the Japanese, Korean’s industry was (and still is) very export-oriented. The Pony small car, benefited by the wage advantage of Korea labours, stormed the Canadian small car market in 1983. The world started to realise the rise of another Eastern car making nation. 

The first self-designed engine appeared in 1991, which signalled the "real" autonomy of R&D. Sales continued to grow in the whole 90s as model range expanded and quality improved. In 1998, Asian finanical crisis hit South Korea hard, but Hyundai took this opportunity to acquire the bankrupted Kia, further strengthening itself.

Hyundai formed strategic alliance with DaimlerChrysler and Mitsubishi in 2000 to share development cost of small cars and 4-cylinder engines. But the alliance crumpled after DaimlerChrysler pulled out in 2004.

 Kia

Kia started producing cars in 1974 under Peugeot and Fiat’s licenses. In 1986. it partnered with Ford, produced the Festiva (Pride) for Ford. The 1992 Sephia and next year’s Sportage SUV reflected the independence of the company which started exporting cars under its own name. It became the third largest Korean car maker but over-expansion was hit by the Asian economy crisis in 1998. Kia bankrupted and was acquired by Hyundai in the same year.
Famous models Nil

Daewoo

Owned by General Motors  - 42%
Suzuki  - 14.9%
Introduction The Asian economic crisis in 1998 hit Daewoo hard. Burdened by heavy debt, Daewoo was finally sold to GM in 2002. The Korean no. 2 car maker has some modern new factories and R&D facilities, but its brand image was too weak. Therefore GM decided to operate Daewoo as an OEM (Original Equipment Manufacturer), supplying cars to Chevrolet, Holden and Suzuki in the latters' badges for export. The Daewoo brand is bounded in Korea market.
Sales figure 2006: 1,520,000 units
2005: 1,150,000 units
2004: 900,000 units
2003: 580,000 units
Location Headquarters & R&D center: Bupyoeng
Production plant : Kunsan, Changwon, Bupyoeng.
Brief History The Daewoo story began with General Motors. In 1972, GM established a joint venture with Korean car maker Shinjin Motor Co., the company named GM Korea and is obviously GM’s weapon to dominate the South Korean market. Although 50% stakes were sold to local industrial giant Daewoo Group in 1978, GM still controlled the development of cars. 

In fact, Daewoo did not really involve much the new car development because GM could always find some outdated cars from its Opel etc. operation to transfer to Daewoo. The Pontiac Lemans of the late 80’s was one of the examples. In the light of supplying the US market to fight against the Japanese small cars, Daewoo started to produce this rebadged version of Opel Kaddet on behalf of GM. However, the project gave the Korean car maker the first taste of large volume export which became the sales policy today. It also gave Daewoo a modernised plant with 170,000 annual capacity. 

GM quit in 1992 as it sold the remaining stakes to Daewoo group. As the US influence evacuated, Daewoo started to develop its own cars. That called for setting up R&D centers in Europe and subcontractting many development projects to overseas consultants. With the help from the Western experts, the small car Lanos was born in 1995. 

Next year, Daewoo invested into Poland’s FSO, forming a joint venture which eventually produces the Matiz mini car. In 1998, SUV maker Ssangyong bankrupted and was received by Daewoo. 

Daewoo group used to have variety of business in different fields. In 1999, the group got into financial crisis due to the over-expansion during the previous few years, thus resulted in selling nearly all business but the car division. The latter also faced the same fate next year. Ssangyong spinned off from the troubled Daewoo in year 2000.

In 2002, GM bought the majority assets of Daewoo and renamed it to GM Daewoo. Because the Daewoo brand had very poor image, its cars are rebadged as Chevrolet for the American and European market, and sold as Holden in Australia. GM's partial subsidiary Suzuki also took 14.9% of Daewoo to let it sell Daewoo's cars as Suzuki in the North America.
Famous models Nil

Ssangyong

Subsidiary SAIC (Shanghai Automotive Industry Corp.) - 48.9%
Introduction Ssangyong is Korea’s off-roaders specialist. Thanks to the technology transferred from Mercedes-Benz, it developed some good off-roaders from zero within a few years. Also don’t forget the Chairman luxurious sedan, Korea’s first and still the best luxurious car.

Running at a volume slightly more than 100,000 cars a year, Ssangyong knows it is too small to survive independently in the competitive market. Therefore it was sold to Daewoo in 1998 and then China's SAIC in 2004.
Sales figure 2005 sales: 141,306 units
2004 sales: 136,000 units
Location Headquarters and main plant: Pyungtaek
Brief History The history of Ssangyong started in 1954 when Hadongwahn Motor was founded. It was later renamed to Dong-A Motor. The company became a manufacturer of commercial trucks, fire engines and other special purpose vehicles during the 70s.

In the early 80s, Dong-A acquired SUV maker Keowha, which made 4WD offroaders licensed from Jeep. The merged company was renamed to Ssangyong in 1986 and started concentrating on SUVs.

The turning point was in 1991, when it signed an agreement with Mercedes for transferring its engine technology and helped it developing light commercial vehicles. This is why you can see many Ssangyong cars and SUVs are equipped with Mercedes straight-sixes. The Musso of 1993 and Korando of 1996 successfully opened the door of global SUV market for Ssangyong. Later, Mercedes even helped Ssangyong developed its first passenger car - the Chairman luxurious sedan.

To produce the Mercedes engines, Ssangyong built its second plant in Changwon. The aggressive expansion led to its bankruptcy during the Asian financial crisis in 1998. The company was bought by Daewoo and its SUVs and Chairman were rebadged as Daewoo. The name Ssangyong disappeared for a while until 2000, when Daewoo itself went into receivership. Ssangyong, with its stronger basis in SUV business and the better prospect of global SUV market, received support from its creditors and spun off from Daewoo.

In 2004, Chinese car maker SAIC acquired controlling stakes of Ssangyong and became its new owner.
Famous models Nil
Copyright© 1997-2006 by Mark Wan
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