Read the passage and answer the questions.,Ford Motors, an American company, is one of the world’s largest automobile manufacturers with production spread over 26 countries of the world. Ford Motors came to India in 1995 and spent Rs 1,700 crore to set up
Read the passage and answer the questions.,Ford Motors, an American company, is one of the world’s largest automobile manufacturers with production spread over 26 countries of the world. Ford Motors came to India in 1995 and spent Rs 1,700 crore to set up a large plant near Chennai. This was done in collaboration with Mahindra and Mahindra, a major Indian manufacturer of jeeps and trucks. By the year 2004, Ford Motors was selling Rs 27,000 cars in the Indian markets, while, 24,000 cars were exported from India to South Africa, Mexico and Brazil. The company wants to develop Ford India as a component supplying base for its other plants across the globe.,Why do you think the company wants to develop India as a base for manufacturing car components for its global operations? Discuss the following factors,(a) Cost of labour and other resources in India.,(b) The presence of several local manufacturers who supply auto-parts to Ford Motors.,(c) Closeness to a large number of buyers in India and China.
Answers
(a) Cost of labour and other resources in India: India has a much lower cost of labour and other resources, making it an ideal location for Ford Motors to set up a component manufacturing base. This allows them to save on costs and improve their profit margins. (b) The presence of several local manufacturers who supply auto-parts to Ford Motors: The presence of local manufacturers in India means that Ford Motors can access a high quality pool of auto-parts at a lower price, making it an attractive proposition for the company. (c) Closeness to a large number of buyers in India and China: By developing India as a component manufacturing base, Ford Motors is able to better serve the large consumer markets of India and China. This gives them a better chance to increase their market share in the region and to expand their operations.
