In 2019 South Korea remains an important partner for the German automotive industry. Numerous cooperative projects and a strong presence at the Seoul Motor Show underscore the commitment of manufacturers and suppliers on the fourth largest market in Asia. German suppliers now have over 70 production plants in South Korea and are involved in cooperative schemes with local companies.
At the trade show suppliers from Germany were represented at a German pavilion initiated by the VDA. For the manufacturers the largest trade fair in South Korea will run until April 7, 2019. The OEMs and suppliers offer a broad portfolio of products in South Korea ranging from lightweight aluminum parts to complete vehicles.
Another important aspect for the German companies is cooperation with firms in South Korea. They held some intensive talks about cooperative projects at the trade show. In 2018 German suppliers exported more to South Korea than ever before. Their exports came to over 900 million euros, which was a new record (3.8 percent up on 2017). But suppliers from South Korea also markedly increased their sales to Germany, which totaled 500 million euros – a huge 13 percent above the previous year’s level.
The passenger car makers also added 8 percent to their exports to South Korea last year, reaching a value of 4.6 billion euros. Only 2015 produced a stronger annual result.
This is the sixth time the VDA has had a German pavilion at the Seoul Motor Show, supported by the German Government and the AUMA (Association of the German Trade Fair Industry). Korean and international automotive brands are taking part at the motor show, along with manufacturers of parts and accessories. The exhibition occupies an area of around 80,000 sq m spread over two large halls on the KINTEX show grounds, and some 700,000 visitors are expected. On the first weekend alone, over 100,000 visitors attended on each day.
Products “Made in Germany” have traditionally enjoyed a very good reputation in South Korea. The manufacturers and suppliers work to keep up their image. The German embassy held a reception to mark the German presence at the exhibition, where Weert Börner, Deputy Head of Mission and Head of Economic Department in the German embassy in Seoul, stressed the high level of commitment shown by the companies represented there.
He pointed out that the manufacturers were not only selling vehicles, but investing in training their employees at dealerships and workshops, and also entering into numerous cooperative projects in research and development, such as in the field of new technologies. He added that it was at least as important that European car makers should have fair market access in accordance with the spirit and rules of the free trade agreement between the EU and South Korea. At present, the German producers in particular often did not receive appropriate treatment from Korean authorities. Furthermore, various “Korea only” regulations were acting as non-tariff trade barriers to all importers. Bilateral talks and the approaching visit of European Commissioner for Trade Malmström to South Korea in April should be used for constructive discussion of topics surrounding market access.
German OEMs have successfully introduced a German-style dual training program in cooperation with the Korean-German Chamber of Commerce and Industry (KGCCI). Since 2017 vocational training has been available in Korea for the occupation of motor-vehicle mechatronics engineer. The training plan, the concept for the trainers and the exams were taken in their entirety from the German system. Since the course was introduced, over 200 apprentices have found employment in the firms. In Korea training helps the companies to find highly qualified employees and offer a career with prospects to young high-school graduates with a good school education.
Another example of the commitment of the German automotive industry in South Korea is the work of the VDA’s Quality Management Center (VDA QMC). Since 2015 the QMC has been working with the Korean Foundation for Quality (kfq). The aim is to establish training courses in quality management in accordance with VDA guidelines, which enable Korean suppliers to gain a qualification for delivering to German manufacturers and suppliers. The VDA QMC and the partner kfq were also present at the German pavilion distributing information about these offers.
Further information about the trade show and the joint pavilion: