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Indonesian mobnas should learn how Korea produce their own car

Written By Redaksi on Thursday, April 14, 2011 | 5:36 PM

There is an interesting story below how Hyundai produce their own car in 1970's manage to become the biggest car producer in the world.

Indonesia's mobnas or national car should learn their story to see that Indonesia is very close to build a made in Indonesia's car. Please read:

In February 1976, Hyundai Motors, still a young Korean automaker, began sales of a new car, the Hyundai Pony.

Strictly speaking, this was not the first Korean car, but it surely was the first Korean car that enjoyed massive commercial success.

The Hyundai Pony launched the car boom inside Korea, and also became the first Korean car to appear in overseas markets.

The Korean car industry is surprisingly young, even though it is somewhat difficult to believe nowadays, when Korea plays a major role in the international automotive industry.

South Korea is the world's fifth-largest producer of motorcars, and in 2009 it produced 3.6 million vehicles, of which roughly two thirds (2.55 million, to be precise) were exported.

The first attempt to make cars locally took place in 1955 when a small Korean company began to assemble copies of the U.S. jeeps, largely using spare parts from de-commissioned military vehicles.

Their efforts attracted much attention and praise back in the 1950s, but the company managed to produce only a small number of vehicles: The market was too weak and the government remained indifferent.

In the 1960s, some Korean entrepreneurs tried to assemble Japanese and American cars, but again with limited success: Korea lacked capital and technology, and the domestic market was very small.

Things changed in the early 1970s when the South Korean government decided to promote the automotive industry as one of the key currency-earners for the country.

This looked like a bold and risky decision at the time: After all, until the early 1960s South Korea had no modern industry whatsoever, and by the early 1970s it was still largely known as a producer of cheap garments, toys and wigs.

By now we can see that this risky decision made perfect sense.

By the 1970s, major South Korean companies accumulated enough expertise to deal with the least demanding types of machine-building, and the military government firmly believed in the advantages of the industrial growth.

General Park Chung-hee, the increasingly authoritarian strongman, had a vision for future Korea, and this vision did not include bucolic villages with thatched roofs, but rather highways, steel mills and gigantic shipyards.

The military rulers did not opt for free competition in the emerging automotive industry and drew a list of companies that would be allowed (and, indeed, required) to mass produce cars.

The list was short, since it included only three companies: Hyundai, Kia and Daewoo. It remained almost unchanged for the next two decades.

To drive away foreign competition, the government introduced high protectionist tariffs that essentially closed the Korean market to outsiders.

It was understood that the first cars would be based on foreign designs, but as a condition of the government's support the producers were required to use an ever increasing amount of locally made spare parts.

The three chosen companies had only limited previous experience in car making.

Hyundai Motors was founded in 1967, and for a while produced some cars in cooperation with Ford and General Motors.

Kia, initially a producer of bicycles, had also experimented with motor vehicles. Nonetheless, the modern mass production industry had to be created from scratch.


In the mid-1970s, a number of locally made cars hit the market.

Kia rolled out its Brisa in early 1974, but it was the Hyundai Pony that came to be affectionately remembered as Korea's first mass-produced car.

Well, this was not completely Korean: Its 1.2L engine and transmissions came from Mitsubishi, while its design was developed by an Italian firm.

Nonetheless, it was produced in Korea, by Korean workers and technicians, and the percentage of the locally produced parts eventually reached an impressive 90 percent.

In 1982, Pony I was upgraded to Pony II, which remained in production until 1990. Pony also has the distinction of being the first Korean passenger car to be exported overseas. The exports began in 1976 when five vehicles were exported to Ecuador.

Eventually, these small cars went to many places in Latin America and the Near East, but soon Hyundai tried an established market; in 1984, the Pony went on sale in Canada.

This led to an unexpected success; for a while, the tiny car from what was still perceived a Third World nation became the top-selling car in Canada.

Indeed, the export played a major role in the growth of the Korean car industry; since the early 1990s between half and two thirds of all Korean cars have been sold overseas.

Nonetheless, the growth of the domestic demand was equally impressive.

In 1970, there were merely 130,000 cars in the nation. In 1985, soon after the debut of the Pony, the number reached the one million mark for the first time.

In 1995, there were eight million cars in Korea, and in 2010 the number of motor vehicles reached the 17 million mark. It seems that the saturation point has been reached: Korea has become a country of the automobile.

The process, which in developed countries took about a century, was complete here in three decades.
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