Why do you think the Ford 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
Answer:
"Wages and salaries paid to the labor in India are much less compared to the developed countries. In addition, raw material and electricity is also cheaper. This is a big advantage to make India as a base to produce goods.
There are companies who are manufacturing auto parts. One among them is Sundaram Fasteners. Due to low production expenses, these companies are able to supply the auto parts to different countries.
India along with China has 30% of the population globally. These two countries offer great market for companies. By having production base in India, it is profitable for both these markets.
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Explanation:
Answer:
(a) Wages and salaries are much lower in India compared to in developed countries. Moreover, raw materials and power is also cheaper. This is a definite advantage which India offers as a production base.
(b) There are many companies which manufacture various auto-parts; like Sundaram Fasteners. Because of their lower cost of operation, these companies supply various parts at less price than price in the developed countries.
(c) India and China together comprise about 30% of the world population and thus they provide a huge market for various companies. Making a production base in India provides easy access to these two markets.
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