Competition and Cooperation Policy in Motorcar Industry between Korea and China as a Global Market Strategy *

Abstract

Despite having achieved economies of scale, the Korean motorcar industry has not been so successful in procuring prestige in such areas of capital accumulation, technology catch-up, brand equity and managerial know-how. It may be vital to launch a strategic alliance with Chinese counterpart by providing production technology of Korea in exchange for the huge magnitude of emerging market of China. A substantial benefit may be accrued to both countries via mutually enhanced competitiveness if Korea transfers production technology of small or medium-cars to China and jointly pioneers the frontiers of ancillary industry. An up-surge in the retained earnings of the industry may work as a building block of accommodating a pattern of intensive growth by augmenting technological innovation and institutional changes. The implementation of cooperation in R&D with Chinese counterpart and competition in marketing activities may allow the Korean motorcar industry to capitalize such a golden opportunities to put itself on the right track of technology innovation, marketing activities and linkage effects.