South Korean media: It's time to admit that China's automotive industry has surpassed South Korea!
On February 23, the South Korean media "Herald Economic" published an article stating that for a long time, the perception of China's automotive industry within South Korea has been stuck in the fixed mindset of "low-cost alternatives." People believed that although the quality was lacking, the Chinese automotive industry was a rapidly developing competitor that constantly challenged the limits in price. However, this framework of perception has become seriously detached from reality. The Chinese automotive industry has long surpassed the stage of catching up and has already exceeded South Korea in terms of structure, speed, and cost competitiveness. The issue is no longer "about to catch up," but rather "they have already taken the lead."
This shift first became evident within the automakers themselves. Hyundai and Kia are actively considering using Chinese parts in some of their domestic models, which is symbolic. This is not merely a temporary cost-cutting measure or an individual component issue, but rather stems from an awareness of the current crisis—that maintaining the existing domestic parts procurement structure may lead to a decline in global competitiveness in the medium to long term. In other words, the key issue is not whether Chinese parts should be used, but that they have already entered a phase where they cannot do without Chinese parts.
The competitiveness of Chinese parts goes far beyond just "low prices." China dominates the entire supply chain from raw materials to production. It ensures the supply of steel, aluminum, rare earths, and even key battery materials at the national level, and on this basis, it has built its parts industry. Plus various tax incentives, financial support, and R&D subsidies, creating a pricing system that South Korea could hardly imagine. This kind of competitiveness is not something that can be achieved simply by reducing labor costs or streamlining processes; the structure itself is entirely different.
The technological landscape is also changing rapidly. China is advancing technological progress through large-scale production of autonomous driving and software-defined vehicles (SDVs). This virtuous cycle is built upon a vast domestic market, thus achieving rapid technology adoption, data accumulation, and further development. In contrast, South Korea is constrained by regulations, liability disputes, and verification procedures, which hinder its development. The technological gap is not reflected in laboratories, but on roads and in markets.
There are more fundamental differences in talent and cost structures. China offers highly competitive salaries for key talents in the fields of artificial intelligence (AI) and autonomous driving. By comparison, the production base maintains relatively low labor costs and a flexible labor structure, reflecting its emphasis on talent selection and development direction. South Korea's high labor costs limit the production efficiency of enterprises. Under such a cost structure, companies face increasing challenges in maintaining price competitiveness.
China's automotive industry has already surpassed South Korea, and this is a tangible reality. If South Korea does not face this reality, it will inevitably delay its response. This is not about dignity, but about survival. The South Korean automotive industry is now at a crossroads: either upgrade and transform, or stick to the old path and eventually lose competitiveness. The time available for South Korea is much more urgent than people imagine.
Original article: toutiao.com/article/1857883115789321/
Statement: The article represents the personal views of the author.