Korea is the most successful of the world's latecomers to the automotive industry. It was the only one to develop a homegrown model using its own technology and became one of the world's top five automakers in 2005. China, despite a 60-year history of making cars, failed to develop a model that is being exported around the world. But all that could change.
Korea could fall behind not only Japan but China as well in the global market for hybrid and electric vehicles, which is expected to account for around 50 percent of the global automobile market by 2020, according to analysis of the three countries' industrial competitiveness by the Samsung Economic Research Institute and the Chosun Ilbo.
First of all, Korea lags far behind China in investment. The Korean government invested W273.6 billion (US$1=W1,115) into the field between 2004 and 2010. In contrast, the Chinese government plans to spend W17 trillion from this year until 2020.
There are also stark differences in terms of allocating research and development experts. China has 30,000 to 40,000 engineers specializing in hybrid and electric vehicles but Korea less than 1,000. Japan is currently in the lead after becoming the first country in the world to successfully commercialize hybrid and electric cars.
"Korea's automotive industry, which is booming at present, must start preparing for the looming era of eco-friendly vehicles or end up facing a nightmarish situation five to 10 years down the road," said Bok Deuk-kyu, a senior fellow at SERI.