Select one (1) of the following scenarios on which to focus your cause and effect paper. Research the topic and include credible sources to support claims. Identify your purpose clearly, incorporate...

IMPORT OF AUTOMOBILE PARTS

IMPORT OF AUTOMOBILE
PARTS
CAUSE AND EFFECT

Student Name
[Pick the date]
TABLE OF CONTENTS

INTRODUCTION ....................................................................................................................................... 3
REASON BEHIND PROCURING THE PARTS FROM FOREIGN MANUFACTURERS ........................ 3
IMPACT OF IMPORTING AUTOMOBILE PARTS ON THE ECONOMY ............................................... 4
IMPACT OF IMPORTING AUTOMOBILE PARTS ON THE PEOPLE ................................................... 5
CONCLUSION ........................................................................................................................................... 7
REFRENCES .............................................................................................................................................. 8

INTRODUCTION
The production in the automobile industry is of complex nature, and involves thousands of different parts
produced by hundreds of different companies. In the production of motor vehicles, the intermediate parts
include nearly about 70% of the value. Earlier, the carmakers were producing these parts-in-house, but with the
advent of time, majority of them now gathers those parts from different producers which are not only situated
within the national boundaries of the same countries, but also from several other countries after the
globalization. Ford and General Motors are some of the companies in the US who are now gathering different
parts from independent producers, rather then producing of their own. Due to globalization and outsourcing,
more than 1/4
th
of the parts in vehicles are assembled in united states which are being imported from other
countries from various independent producers.
REASON BEHIND PROCURING THE PARTS FROM FOREIGN
MANUFACTURERS
Cost being the major cause of Import
Importing automobile parts from foreign manufacturers situated in low cost producing countries like China
majorly helps the car manufacturer in lowering its costs, whereby improving its profit margins. Since the
Chinese currency is weak as compared to the US dollar, it really makes sense for the automobile manufacturer
to import the parts from China at a fraction of costs that they would have incurred.
Lower commitment
Scaling up the production at the time of expansion, and cutting down production at the time of economic
recession will not be practically possible if the...