The!rise!in!the!Korean!currency!is!critical!because!both!Kia!and!Hyundai!sell!their!cars!at!a!
very!low!profit!margin.!Both!manufacturers!chose!a!policy!of!quantity!over!quality!in!order!
to!gain!their!profits.!Since!the!cars!were!manufactured!in!Korea!and!then!shipped!to!the!US,!
the!exchange!rate!had!an!impact!on!the!profit.!The!higher!the!value!of!the!dollar!is,!the!
more!profits!can!be!recorded!in!Won.!When!the!value!of!the!Won!rises!(or!the!value!of!the!
dollar!falls,!which!is!essentially!the!same)!the!Korean!companies!have!less!profit!to!record!
in!their!books.!In!order!to!prevent!losses,!the!car!manufacturers!might!have!to!increase!the!
sales!price!on!the!US!market.!It!makes!sense!for!these!companies!to!expand!and!open!
factories!in!the!United!States.!Car!manufacturers!following!a!more!quality!based,!high!profit!
margin!policies!have!more!flexibility!regarding!foreign!currency!fluctuations.
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