The rise of Korea provides robust support for the proposition that strong institutions are necessary for intensive automotive development. By 2017, Korea had become the world’s sixth largest producer of passenger cars, and Korean components producers were among the few companies from outside Europe, Japan, and North America to feature in the world’s top 100 producers. Korea’s success built on a highly -educated workforce and the creation of automotive testing and research institutions. The origins of these institutions can be traced to the external threat faced by the country, and to its inability to earn revenue through exports of agricultural products or raw materials. As Hyundai-Kia grew into a global corporation, the research institutions became more important for medium-sized companies, and in promoting basic research. Hyundai-Kia’s success stands in marked contrast to the three subsidiaries of foreign automakers, which all struggled as Korean labor costs rose substantially above those of developing economies.