Economics
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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. 1700 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 2017, Ford Motors was selling 88,000 cars in the Indian markets, while another 1,81,000 cars were exported from India to South Africa, Mexico, Brazil and United States of America. 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 autoparts to Ford Motors
(c) closeness to a large number of buyers in India and China
Global & Ind Econ
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Answer
Developing India as a base for manufacturing car components for global operations involves considering several strategic factors:
(a) Cost of Labour and Other Resources in India — India offers a significant cost advantage when it comes to labour and other resources compared to developed countries. The cost of skilled and semi-skilled labour in India is lower than in many Western countries, which helps in reducing the overall cost of manufacturing. Additionally, the cost of land, utilities, and regulatory expenses can also be comparatively lower in India.
(b) Presence of Several Local Manufacturers Supplying Autoparts to Ford Motors — India has local manufacturers that supply automotive components and parts. These manufacturers often provide high-quality parts at competitive prices. By leveraging these local suppliers, Ford Motors can streamline its supply chain and lower logistics costs. This local presence also allows Ford to quickly adapt to market demands and changes in product specifications, enhancing flexibility and responsiveness.
(c) Closeness to a Large Number of Buyers in India and China — India and China are two of the largest and fastest-growing automotive markets globally. By manufacturing car components in India, Ford Motors can reduce transportation costs and delivery times to these important markets.
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Related Questions
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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. 1700 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 2017, Ford Motors was selling 88,000 cars in the Indian markets, while another 1,81,000 cars were exported from India to South Africa, Mexico, Brazil and United States of America. The company wants to develop Ford India as a component supplying base for its other plants across the globe.
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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. 1700 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 2017, Ford Motors was selling 88,000 cars in the Indian markets, while another 1,81,000 cars were exported from India to South Africa, Mexico, Brazil and United States of America. The company wants to develop Ford India as a component supplying base for its other plants across the globe.
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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. 1700 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 2017, Ford Motors was selling 88,000 cars in the Indian markets, while another 1,81,000 cars were exported from India to South Africa, Mexico, Brazil and United States of America. The company wants to develop Ford India as a component supplying base for its other plants across the globe.
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