Globalisation and The Indian Economy — Question 4
Back to all questionsWhy 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
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.