193k views
25 votes
In 2009 the Ford Motor Company announced plans to spend $490 million on

building a third car assembly plant in China
Briefly explain two likely reasons why the Ford Motor Company plans to build
a third car assembly plant in China​

User Timotimo
by
3.8k points

1 Answer

10 votes

Answer:

  • Cheaper labor.
  • Cheaper auto parts.

Step-by-step explanation:

China has cheaper labor rates than the United States in comparative industries including in the motor vehicle producing industry. Ford may want to take advantage of this to make cars at a smaller cost in China and therefore make more profit in sales.

Car parts are also easier and cheaper to acquire in China. Steel for instance, is a very valuable commodity in motor vehicle manufacturing and China happens to be the largest producer in the world. Having access to cheaper materials would increase Ford's profitability as well.

User Eziz Durdyyev
by
3.3k points