Over the years, a trend has been emerging where the largest automobile manufacturers build production plants in developing countries to lower production costs. These countries include China, Malaysia, and others located in Southeast Asia. For example, "The Big Three" automakers (GM, Ford and Chrysler) have merged and partnered with other European and Japanese vehicle manufacturers, producing vehicles in each other’s countries to save transportation costs.
This is an example of horizontal FDI, or Foreign Direct Investment, which a company replicates its production elsewhere in the world. For example, in the 1980s, Toyota produced almost all of its cars in Japan and then exported them to other countries. Rising demand over the years paired with higher trade costs caused Toyota to expand its production overseas. Toyota has replicated its production process in many different countries, such as the United States, Canada, China, and Brazil.
The event that sparked the demand which fueled Japan’s FDI was the oil embargo in the 1970s, w...
... middle of paper ...
Government officials in China have initiated policies that are intended to encourage the continuing development of China 's domestic automobile manufacturing industry. Nevertheless, there are significant trade barriers for foreign competitors in the way of tariff policies that are applied to foreign auto imports. This restrictive trade environment has contributed to the serious problem of illegal imports of foreign cars into China. In the past China relied on its foreign partners to develop new vehicles but Chinese automakers are looking to create new policies and methods through foreign joint-ventures to continue the development of China 's automotive industry. These conditions present a significant challenge for China 's automotive industry, and it is expected to take a considerable amount of time before China becomes a global competitor in the automotive market.
Need Writing Help?
Get feedback on grammar, clarity, concision and logic instantly.Check your paper »
- The automobile is an invention that has had a tremendous impact on society. The Stanley Steamer-the most successful steam car was invented in Newton Massachusetts in 1897 by Francis and Freelan Stanley. It wasn’t produced until 1924. The steam car was not a very popular device as it didn’t travel well on long distance trips it was too hard to start and there was a hazard from the open fire. Early on the electric car was the most popular type of automobile. The electric car owes its invention to William Morrison.... [tags: The History of Cars]
1995 words (5.7 pages)
- The history of automobile audio dates back to the early 1900s. George Frost did the earliest car audio experimentation in 1922. The evolution of car radios began in the Transitone Th-1, in 1927. The first FM turner band in cars was introduced in 1952. In 1965 the 8-track player was introduced in Ford vehicles. In the early 1960’s, cassettes were introduced, but didn’t become popular until 1977. The FM band became more popular in the 1980s, and the first car compact disc players were introduced in the 1980s.... [tags: Automobiles ]
1227 words (3.5 pages)
- Did you know that the early automobiles used levers not steering wheels. The first automobile was made in 1769 for the French army. Though, people believe that the first true automobile was made by Karl Friedrich Benz in 1885.This automobile was powered by gasoline and hade three wheels not four. The first carriage-sized automobile suitable for use on existing wagon roads in the United States was a steam powered vehicle invented in 1871, by Dr. J.W. Carhart. It induced the State of Wisconsin in 1875, to offer a $10,000 award to the first to produce a practical substitute for the use of horses and other animals.... [tags: vehicle, transportation, pollution]
557 words (1.6 pages)
- Starting in the late 1700's, European engineers began tinkering with motor powered vehicles. Steam, combustion, and electrical motors had all been attempted by the mid 1800's. By the 1900's, it was uncertain which type of engine would power the automobile. At first, the electric car was the most popular, but at the time a battery did not exist that would allow a car to move with much speed or over a long distance. Even though some of the earlier speed records were set by electric cars, they did not stay in production past the first decade of the 20th century.... [tags: essays research papers]
1083 words (3.1 pages)
- Ever since the invention of the automobile, the car has been a large part of American life. Currently there are more than 16 million cars sold that are made in America (Magee, Ferrara, and LaMeau 149). It is something that is used every day in America by millions of people. The automobile opened the door for new opportunities and new experiences. It symbolizes the American ideal of freedom and independence. Americans have embraced the automobile and have implemented it into their lives. Automobiles fueled the American economy and helped establish a nationwide network of roads.... [tags: history of the automobile, cars, technology]
1333 words (3.8 pages)
- ... Ford had set out to create an automobile that would be cheap enough for the masses to afford. This began with the creation of the Model T in 1908, a simple automobile with no customization options (Devins, 387). To lower the price of his automobile Ford experimented with various techniques. The first was interchangeable parts, the creation of identical parts that would fit in any and all of the Model T’s. This required significant advancement in machining, the creation of parts, but after a couple years he was able to create machines that could be easily operated and create identical, interchangeable parts ("Henry Ford Changes the World").... [tags: history, steam engine, industrial revolution]
1343 words (3.8 pages)
- Henry Ford founded the Ford Motor Company (FOMC) in Michigan on June 16, 1903 after “previous attempts to manufacture cars had failed.” Early in its history the company saw much success with the expansion of Lincoln, the company’s luxury vehicle, along with investments in Mazda and purchasing the “Aston Martin, Jaguar, and Volvo and Land Rover brands.” However, the company has since seen drastic reductions in its stake in Mazda, along with selling all four brands to other automakers. More recently, through Henry Ford’s vision, FMC has become one of the largest automotive manufacturers in the world given that it manufactures and distributes automobiles across North America, Europe, Asia an... [tags: notorious automobile mdels in history]
1967 words (5.6 pages)
- Around the world, we live in today, there are various international commodities. Commodities are a raw material or primary agricultural product that can be bought, sold, or traded across the globe. One major commodity that we often over look is the automobile. From the beginning of time to present day, the need for transportation and travel has grown dramatically. From carrying goods, to being traded, to being sold in car lots for personal use, the automobile is a huge part of our history and present day lives.... [tags: transportation, history, lives]
648 words (1.9 pages)
- Automobile Automobiles is a big part of a modern Americans daily life but it all started in 1672 when steam powered vehicle was made as a toy for the Chinese emperor it was very small and couldn’t carry a driver of the emperor himself but it was the first steam powered automobile. But is in the 18thcentury steam powered vehicle was made large enough to move cargo form one place to another. But in 1768 when the first steam powered automobile by Nicolas-Joseph Cugnot he was however not noticed for his accomplishment.... [tags: Automobile, Internal combustion engine]
827 words (2.4 pages)
- The Invention of the Modern Automobile “The way to make automobiles, is to make one automobile just like another automobile .” With this statement, Henry Ford had invented the modern automobile. Many people may question this idea, as they know self propelled vehicles were in existence long before the days of Ford. In fact, these people would undoubtedly be correct; the idea of a self propelled vehicle and its actual realization had been present for at least one hundred years before Ford ever made one.... [tags: Cars Car Ford History Essays]
4294 words (12.3 pages)
- The Tell Tale Heart By Edgar Allen Poe
- The Murder Of Police Veteran
- Evaluation Of The For A Nurse
- The Effects Of Sexual Assault On The Society And Justice Program At Dawson
- Improving Enrollment And Revenue Are Problems Facing Many Small Liberal Arts Colleges
- Police Corruption And Its Effect On Society