Question

Read the passage on the left and answer the questions.
Would you say Ford Motors is a MNC? Why?
what is foreign investment? How much did Ford Motors invest in india
By setting up their production plants in India, MNCs such as Foro
Motors tap the advantage not only of the large markets that coun
such as India provide, but also the lower costs of production. Explain
the statement
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
in what ways will the production of cars by Ford Motors in India lead to
nterlinking of production?
what ways is a MNC different from other companies?
learly all major multinationals are American, Japanese or European,
uch as Nike, Coca-Cola, Pepsi, Honda, Nokia. Can you guess why?​

Answer 1

Explanation:

1. Yes, Ford motor is a Multi National Corporation(MNC). An MNC is a company which has its production unit set up in more than one countries. Ford Motors also has its production unit in a number of countries including India. Hence, it is an MNC.
2. Foreign investment is an investment made by an MNC. The money which MNCs spend for buying assets in other countries is called foreign investment.
3. Ford Motors spent Rs. 1700 crore to set up a plant near Chennai in India.
4. By setting up production in India, MNCs get a number of benifits. India provides a market to the MNCs. Ford motors, in 2014, was selling 77,000 cars in Indian markests and exported another 77,000 cars to foriegn countries. Their cost of production is also reduced here because India has highly skilled engineers who can understand the technical aspects. It also has English speaking youth and a good network of transport.
5. The company wants to develop India as a base for manufacturing car components because of the advantages offered by India. The labour here is cheap. Special Economic Zones have been developed and MNCs in SEZs do not have to pay taxes for an initial period of 5 years.
6. An MNC is different from other companies as unlike local companies, its has its production in many countries.
7. Nearly all multinationals are American, european or japanese because these countries are developed and are advanced in technology. These countries are richer too! Moreover, international trade in developing countries like India started much later. So some delay is bound to take place.

Hope it helped.

Jai Hind!