Transportation Infrastructure or Economic Power? Development of the Automobile Industry in the United States

Abstract

The motive for the Korean automobile industry’s US investment is the easing of trade regulations and managing a stable supply chain by establishing local production. The Korean automobile industry has undergone major changes due to strong trade regulations since the beginning of the Trump administration and the COVID-19 pandemic. This has affected parts production, procurement, and automobile manufacturing and shaken the foundation of the automobile industry supply chain. The purpose of this study is to provide implications for additional investment decisions by analyzing the impact of the US industry and economy on the success of the automobile industry if Korean automobile companies advance into the US. This study conducted panel analysis by collecting 10 years of data to investigate the impact of economic, industrial, and infrastructure factors in each state on the success of the automobile industry. This study reflected the characteristics and investment motivation of the automobile industry. The study findings revealed that an export-oriented industrial area is suitable for strategic investment rather than a region where the economy is simply large or where all industries are developed. In addition, when making investment decisions, it is important to prioritize the internal capabilities of the company rather than external factors.