Neo-Liberal Strategy

Neo-liberal strategy
Tax reforms:
1. A significant tax reduction, promotion of vertical integration leading to new business opportunities.
2. For the foreign-invested business which takes more than one year in undertaking a construction, assembling or installation work or in processing or manufacturing a large machine or equipment, enterprise income tax shall be imposed in each fiscal year on the remainder after deduction of expenditures from the revenue created according to the amount of work performed during the same year.
Deregulation:
1. Government made a radical policy change requiring the automobile industry to shift from assembly production of foreign cars on a CKD basis to the development of locally designed Korean cars. This prompted Hyundai into producing it first car in 1973.
2. Government formulated the long term plan for promotion of the automobile industry and ordered four automobile companies to submit detailed plans to develop Korean cars. Hyundai was one of this companies.
Trade liberalization:
1. Hyundai entered into an overseas assembler agreement with Ford.
2. Korea began to liberalize unilaterally in the early 1980s. Largely in order to copy with an economic crisis, this had risen from the inefficiency of investment in heavy and chemical industries.
3. Hyundai exported 62,592 cars to Europe and Asia. Pony accounted for 98% of Hyundai’s exports.
Labour-intensive export:
1. Training of Hyundai engineers at Ford sites.
2. For one and a half years, the Hyundai’s engineers lived together in an apartment near Italy Design Company, kept a record of what they were learning during the day, and had group reviews every evening.

Structural-institutionalist strategy
Protection and support of infant industry through laws:
1. To foster growth of the industry, the government protection of the local market from new entrants and from new entrants and from new foreign knockdown imports.
2. Hyundai have an opportunity to expand its car business into the subcompact market under government protection.
3. The model had to be smaller than 1,500cc in engine size with a local content ratio of at least 95%, less than $2,000 in production cost.
Investment and export subsidies:
1. The Korean government provided tax and financial incentives in

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