Question

German auto exporters rely on their distributing​ agencies, which are owned and controlled by the​ automakers, to sell the products to franchised dealers in the United States. This is an example of​ ______.

Answer 1

German auto exporters use direct investment in the U.S. market to maintain control and impact international trade, which promotes competition and innovation.

Step-by-step explanation:

German auto exporters' strategy of owning and controlling distributing agencies to sell their products to franchised dealers in the United States is an example of maintaining direct investment in foreign markets.

This approach allows companies to retain more control and coordination over their international operations, and aligns with strategies that involve global supply chains and international trade.

International trade and direct investment are key components in creating competitive markets and ensuring a diversity of product offerings for consumers, which, in turn, encourages innovation and improvement in product quality due to competitive pressure.