Q. 34.2( 13 Votes )

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.
By setting up their production plants in India, MNCs such as Ford Motors tap the advantage not only of the large markets that countries such as India provide, but also the lower costs of production. Explain the statement.

Answer :

To ensure profit maximization and cost cutting, MNCs generally set up production plants where

(a) Proximity to market

(b) Skilled / unskilled labour is available at a lower cost.

(c) Availability of other factors of production is there.

(d) Business friendly Government policies

Ford Motors has done the same by setting up a large plant near Chennai, as all the above conditions were met.

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PREVIOUSRead 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. What is foreign investment? How much did Ford Motors invest in India?NEXTRead 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.
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