Sunday, April 16, 2006
I enjoy looking at global branding. This article highlights Korean branding. I often tell groups that Car Branding has huge impact and is one reason why many American knew the Hyundai brand years before Samsung and LG became popular.
International rankings tell the ``prestige gap’’ between business and financial companies in Korea. Hyundai Motor, including its affiliate Kia Motors, ranked sixth in 2005 in world automobile sales, while no Korean commercial bank makes the global banking top 50.
Hyundai and Kia are drawing more attention in overseas markets as Korea’s prosecution has been investigating the two domestic capital-controlled automakers for nearly a month.
Business leaders worry about the affect the Hyundai scandal will have on the macro-economy, as the auto industry has topped the exports of major industries over the past several years.
Furthermore, the domestic automobile industry has been the most dutiful player among major industries, which are responsible for the nation’s trade surplus.
The auto industry, involving completed cars and auto parts, is posting the largest surplus among all sectors, including semiconductor, wireless telecommunication and steel.
It is difficult for the semiconductor industry, which boasts the best of its kind in the world and the country’s No. 2 export engine, to catch up with the automobile sector in terms of the export-import balance.
According to the Korea International Trade Association (KITA), carmakers reported a trade surplus of $33.6 billion in 2005 while chipmakers posted $4.9 billion.
The figure of $33.6 billion exceeds that of Korea’s total trade surplus of $23.2 billion for 2005. Automobile exports accounted for 13.3 percent of total exports of all sectors, a KITA official said.
In 2004, the surplus in the auto industry came to $28.4 billion while that of the semiconductor unit stood at $3 billion.
The auto industry saw export growth reach 25.5 percent on average during the 2001-2005 period, surpassing that of the total industries of 17.6 percent.
According to the Korea Automobile Manufacturers Association, one out of every 10 employees in the country works for carmakers or auto parts producers, such as Hyundai Motor, Kia Motors and Hyundai Mobis.