The point to note is that, if Ford takes Daewoo and DaimlerChrysler succeeds in winning control at Hyundai the take over of the Korean car industry by Western capital would be near complete. That take over deserves more attention than it has received, given the fact that South Korea is the second largest car maker in Asia and Daewoo and Hyundai have a major presence in international markets as well. However, the Western invasion does not stop even here. In May, Renault took over Samsung Motors at US$562 million through negotiation with its creditors and agreed to set up a joint venture with Samsung Group, which is capitalized at 360 billion won (US$415 million) and has assets worth 1 trillion won (US$870 million). Clearly, South Korea's automobile industry has been virtually recolonised.
 
But the process neither begins or ends in Korea. It has touched Asia's largest car producer Japan as well. More than a year ago, French car maker Renault looking for a place under the sun as a global firm, acquired a stake of 35 per cent in debt-ridden Japanese auto-major Nissan for $4.3 billion. The acquisition gave French firm a veto and a significant, even if not controlling voice, on the Board. For Renault, this meant a break from its European isolationism and a presence in Asian and American markets through its Japanese operations.
 
The Renault entry comes in the wake of a gradual increase in Western presence in Japan's highly-protected automobile industry. After Ford's acquisition of small car-maker Mazda two decades ago, the world's largest automobile producer General Motors begam investing in a number of Japanese car makers. It now owns 49 per cent of Isuzu, 9.9 per cent of Suzuki Motors and 20 per cent of Fuji Heavy Industries, which controls Subaru. But the Western presence has grown rapidly more recently. In March this year, DaimlerChrysler bought a 34 per cent stake in Mitsubishi Motors, Japan's fourth-biggest car maker. The take-over came in the wake of serious financial trouble at Mitsubishi, which unlike other Japanese majors had concentrated on the Japanese market, selling 65 per cent of its vehicles there. When slowing growth generated financial difficulties, DaimlerChrysler found the opportunity. Since then Mitsubishi has been restructuring its operations, increasingly targeting markets abroad and even planning a shift in headquarters to the US.
 
As a result of such developments, to quote the London Economist, "the industry's composition is not what might have been expected ten years ago. The Japanese producers, who were then terrifying the world, are today mostly being folded into foreign groups. The biggest, Toyota, is slipping down the size league; little Honda survives only because it is nimble and makes products other than cars. Detroit, once tipped for the rustheap by doomsters, is back with a vengeance."
 
The reasons for this rush East are not hard to find. On the surface, the market for cars in the West (Europe and America) appears to be in the midst of an almost unprecedented long-boom. Yet, analysts report, the industry there is plagued with over-capacity to the tune of 25 per cent, with damaging consequences for the bottom line of companies. The results are most stark in the UK, where two of the largest car factories employing more than 12000 workers are on the brink of closure. The first is the BMW plant at Longbridge in Birmingham. The second is the Ford plant at Dagenham, which is reportedly on the block as part of a major reform by the company of its troubled European operations. These threats are real, because Rover the BMW major recorded close to a $1 billionm loss last year and Ford in Britain is reportedly leaking close to £60 million, besides being saddled with excess capacity and outdated capacities.
 
This problem of excess capacities and weak profits has forced firms to turn their attention to the Asian market, which is expected to revive sharply in the wake of the crisis. Also with Asian currencies having depreciated substantially, Asia has once again emerged as a competitive source for world markets. Not surprisingly, Daimler's chief, Jurgen Schrempp, has reportedly stated that he wants the surging Asian market to provide a quarter of sales within a decade, compared with 3.2 per cent today,
 
The way in which this Asia-based expansion is sought to be achieved is to use the voluntary and forced liberalisation of foreign investment laws, the depressed state of markets and the extremely difficult financial situation faced by debt-burdened corporations, to take over what were some of the most competitive industrial capacities at bargain prices. In the event, once independent challengers of Western automobile power are now turning into outsourcing subsidiaries of automobile majors from the West. As a corollary, the acquisitions, mergers and alliances that recent developments have spawned is changing the structure of the world's automobile industry, because Asia has been important in the international car industry both as market and supplier. Three big groups are expected to dominate the industry globally: GM, Ford and DaimlerChrysler in that order. Taking account of all partners and alliances GM is estimated to control 20 per cent of the world's market, with Ford following close behind. If these firms manage to acquire the likes of Toyota and Volkswagen, they could together occupy close to three-quarters of the markets. Concentration has proceed apace with the gradual erosion of indigenous production in Asia. In a virtual replay of an old act, centralised capital from the West is once again colonising the East. The difference is that this time around, the East is industrialised and internationally competitive.