SEOUL, KOREA - Korea IT Times was able to spend some time with Yoon Sang-jick, Minister of Trade, Industry & Energy (MOTIE), to ask him a series of questions regarding the 2013 Seoul Motor Show. The followings are excerpts from this interview with him – Ed.
The Ministry of Trade, Industry & Energy has always actively supported the Seoul Motor Show. What are the expectations that the Ministry has for the Show, and has the Show lived up to those
Since its inception in 1995, the Seoul Motor Show has served as a venue for presenting the latest trends and cutting-edge technologies within the global automotive market. By stimulating technological competition among car makers, the show has ultimately taken part in expanding the base of the auto industry. This year, under the theme of “With nature, for the people”, the show will feature hosts of green cars as well as smart cars, ultimately presenting the future trends of automobiles.
On top of this, the show is expected to draw 15,000 overseas buyers and amass USD 1.5 billion during the buyers’ meeting. I expect that this will provide an opportunity for Korea’s small but competent auto parts companies to break into the global market.
Eco-friendly trends, the theme of the Seoul Motor Show 2013, have been an important issue facing the global automobile industry. Can you tell us the prospects for the green car market
Green vehicles are forecast to account for approximately 35% of total car sales worldwide by 2020. This prediction is based upon high oil prices, environmental regulations, and laws for the promotion of green cars in each country. A variety of green models - clean diesel cars, hybrid cars, electric cars, and hydrogen fuel cell cars - are currently in competition, and of yet it is unclear what will be the leading technologies in the future green car market.
In Korea’s eco-friendly car markets, hybrid and clean diesel cars that combine cutting-edge technology and price competitiveness have displayed immense growth in recent years. The number of registered hybrid cars has risen sharply, from 519 in 2008 to 36,603 in 2012. As for electric cars or hydrogen fuel cell cars which harness new power engines, the market development at home and abroad is relatively slow owing to low performance, high price tags, and insufficient infrastructure. In the long run, however, these technologies are expected to lead the green car market on the backing of governments’ R&D measures, and development of key industries’ investment.
On top of this, Korean auto part companies have recently expanded investment in technology development and production facilities for green cars, for example, to improve the overall performance in electric vehicle batteries.
With the convergence of ICT, smart cars are expected to greatly affect the future of driving. What are the challenges ahead for the development of smart cars.
The emergence of “smart cars”, essentially the convergence of ICT and vehicles, are expected to shift the paradigm of auto industries as well as car culture itself. In an era where human-centered values such as the environment, safety, and convenience are becoming increasingly important, technologies designed to reflect such values are continually evolving.
It is time for Korea’s auto industry to gain a new competitive edge to be the first-mover in the global market using the paradigm shift as momentum. Korea’s auto industry has seen a remarkable improvement in its global competitiveness. The convergence of vehicles and hardware such as IT and electronics has showcased a flurry of activity to date. In the future, however, creative capacity through the convergence of vehicles and soft power such as knowledge, innovation, and software will become increasingly important. For this, it is vital to nurture people who possess creativity and imagination.
On top of fostering the conventional hardware-side, the government plans to heighten its efforts towards the technological development of smart cars in conjunction with transportation and communications. The hope for these efforts is the fruition of a creative economy, economic growth, as well as job creation. The government will also provide support measures for small and medium-sized auto parts companies to allow for their advancement of technology through the convergence of information technology.
This year, buyers meetings for parts are taking place for the first time and participation of auto parts companies has also increased. Can you tell us the prospects for Korea’s auto parts industry
The auto parts sector is one of key export industries in Korea, posting USD 24.6 billion in exports and USD 19.7 billion in trade surplus in 2012. This industry has seen a faster growth rate of 26.8% over the past ten years, compared to 14.2% for completed automobiles. This rapid expansion appears to have stemmed from the technical improvement of Korea’s automobile industry and the expansion of overseas production.
In recent years, global car makers are increasingly outsourcing their operations. It is expected that Korean auto parts companies will take advantage of current trends together with growing opportunities though FTAs. It is necessary for Korean auto companies to fully harness this in order to expand the base of the auto industry and gain a foot hold in overseas markets.
As for small companies, however, many are still struggling to break into the global market owing to their lack of experience, information, and marketing strategies despite possessing sufficient technical skills. My hope is that more global auto industries set their sights on Korean auto parts companies that combine state of the art technological and price competitiveness. Korea’s government will also back these companies to help them cope with difficulties as well as to advance into the global market by taking opportunities.
