Undeniably, some negative external factors created big hurdles for the export-driven economy last year. Among those were economic slowdowns in some of South Korea’s key export destinations.
Nevertheless, it would be an irresponsible stance if any enterprise focused only on finding reasons to justify a retreat in its trade performance.
Cheap crude oil has been one of the few frequent excuses raised by some business lobbies and conglomerates for their sluggish exports and overseas development projects. But the handicap had an impact on only a few industrial sectors.
The current era of low-priced crude is at least simultaneously applicable to their foreign competitors. The epoch-making nosedive in prices seems to rather be an encouraging factor for Korea, a heavy importer of oil as a raw material.
History shows that upward oil prices used to dent business sentiment, and skyrocketing prices had dealt a serious blow to the majority of manufacturers and the overall economy.
As another hackneyed excuse, conglomerates had picked the Korean won’s appreciation against the U.S. dollar for a factor weakening product price competiveness. The sort of worries were rampant among stock analysts and the media whenever the local currency was gaining against the dollar and the Japanese yen.
Recently, the situation has been overturned in the wake of the U.S. Federal Reserve’s tighter monetary policy to recoup the greenback via rate hikes. On the back of the weak local currency — approaching 1,200 won per dollar — as they might have wished, export-oriented firms might see a noteworthy recovery this year.
Practically, it is time for exporters — led by Samsung and Hyundai Motor groups — to find more fundamental solutions that can make them resilient to external shocks. Sales of Apple Inc. and Toyota Motor Corp. appear not have been swayed by fluctuations in crude prices or currency values.
Samsung and Hyundai Motor have recently been challenged by Chinese businesses in segments such as smartphones, computers and automobiles. They include Xiaomi, Huawei Technologies, Lenovo Inc. and Changan Automobile.
The quality gap between the Korean and Chinese products is thought to have narrowed rapidly.
The third-generation leaders of the typical chaebol face a showdown with China, as there is a possibility that the heirs — Samsung Electronics vice chairman Lee Jae-yong and Hyundai Motor vice chairman Chung Eui-sun — will emerge as heads of the groups, respectively, this year.
Considering the publicized or reportedly low-key power transition processes in the two groups, the whistle announcing the start of their time in charge has effectively been blown.
Since the first-generation era of the late founders — Chung Ju-yung and Lee Byung-chull – Hyundai and Samsung have accounted for a great portion of the nations’ gross domestic product. Their grandsons should thoroughly review what unguarded points allowed Chinese players to be chasing them so closely.
Daunting tasks facing is the same to the third-biggest chaebol SK, No. 4 LG, and No. 5 Lotte.
Wide attention is being paid to the coming New Year messages from chairmen or CEOs in the conglomerate sector.
They are scheduled to deliver messages to their staff via intragroup communication channels or speeches on Monday, the first workday of 2016.