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 1,700 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 2004, Ford Motors was selling Rs 27,000 cars in the Indian markets, while, 24,000 cars were exported from India to South Africa, Mexico and Brazil. 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 auto-parts to Ford Motors.
(c) Closeness to a large number of buyers in India and China.
The company wants to develop India as a base for manufacturing car components for the following reasons
(a) Scores of local manufacturers are supplying car components to ford’s Chennai plant and the MNC has also found that the location would have greater connection to the rest of the market.
(b) Lower cost of labour and materials in India compared to markets like South Africa, Mexico and Brazil, will result in more profits for the MNC.