INTERNATIONAL MOTOR VEHICLE PROGRAM MASSACHUSETTS INSTITUTE OF TECHNOLOGY CENTER FOR TECHNOLOGY, POLICY, AND INDUSTRIAL DEVELOPMENT FY97 Working Paper The Production System of Korean Automobile Industry

I. Introduction Korean automobile industry achieved dramatic development from the stage of simple assembly of knocked-down parts to the country of 5th production volume in the world during last 30 years. This development might be achived by many factors inside or outside of the country compositely, but it might be impossible without the support of production system by which automobiles were produced efficiently. The production system of world automobile industry experienced revolutional change since 1970's. The Fordism or mass production system, which has been the dominant paradigm of production system contributing mass production and mass consumption during 20th century is confronting a crisis now. It was a very efficient system of producing standard product in large volume. But the mass production system cannot respond to the trend of circumstances in which demand is diverse and market is segmented. The production system suitable for producing standard product in a large volume cannot adjust to changing models or volume flexibly according to the change of demand. The workers also cannot display the ability (or the skill) of changing the contents of work according to the change of product models or volume and experience various side effects coming from the sense of severe alienation at the work. The new production system which comes after mass production system is focusing on the overcoming these limit of mass production system. How to innovate the production technology enabling to change the product models or volume according to the demand change and how to reorganize the job of workers and work organization enabling to be