CONCLUSION

To sum up the role of the Korean government with regards to its automobile industry, the Korean government began by playing an extensive role in nurturing and supporting its automobile industry during its infant stages through a combination of import-substitution and export-promotion policies. Once the relevant and necessary infrastructure were in place and the automakers gained stable footing, government policies evolved and became less interventionist in nature although it continued to provide protection. Subsequently, when the Great Asian Crisis struck, the Korean government lacked the necessary resources to bail the badly hit automakers out. Hence, when Korea was forced to resort to the IMF's bailout package, automakers knew that they had little choice but to rely on their own initiatives to undertake painful and massive overhauls to keep their companies afloat. As the reforms at this stage were implemented under private initiative rather than government initiative, the results of those reforms did not have a uniform effect on the various automakers. Companies such as Hyundai-Kia achieved a far higher degree of success in its reforms in comparison with the other Korean automakers such as SsangYong. Therefore, ironically, despite the numerous efforts that the Korean government undertook in striving for a globally competitive auto industry, it was when it finally left the industry to free market forces that it began to thrive.

There is no doubt that the government implemented its numerous policies with good intentions. The policies were supposed to ensure that Korean cars achieved certain standards of quality, and the chaebol structure was supposed to foster cooperation and provide synergies between the various industry players. Unfortunately, the figures speak for themselves. Although Korean car exports increased when there was relentless government support, the achievement pales in comparison with the success after the Great Asian Crisis, when free market forces were at play (as shown in figure 1).

In conclusion, it could be argued that protectionism was necessary during the very early stages of development. However, the government should have stopped intervening once the necessary infrastructure was in place and let private initiative take the lead, rather than wait for a crisis to happen before being somewhat forced to do so. Therefore, had government intervention dissipated sooner, rather than later, the Korean automobile industry would have been successful earlier.