¶ … automotive materials imported from a foreign manufactures to the local market. It will also emphasize on the effects it caused to the economy of the United States. Finally, the study analyzed the effect of import of materials from foreign manufactures to the people of the United States.
It's more likely to find that, in every household in the United States, almost sixty five percent (65%) of the households for example utensils, clothes and even cars are not produced in the United States. They are manufactured somewhere in China, India, Mexico or Bangladesh, or the materials used to manufacture then were imported and assemble back here in the United States (Bill Canis, 2006). Since the year 2006, the automotive industries in the United Sates have witnessed a steady growth on import of materials from foreign manufactures. Industrial experts further expect that domestic vehicle manufactures will lose their market share to U.S. companies, which are foreign-based manufactures and importers. This is because of low labour in these countries where they have set their plant automaker (KS Gallagher, 1999).
However, many automotive manufactures are trying to become suppliers to the foreign-affiliated automakers transplant, in bid to offset losses which they incurred when setting up transplant in a foreign country (Clarke and Eden, 2008). Besides, some are finding it difficult to enter transplant automakers' foreign supply chains, because home-based transplants have previously established relationships with home-market manufactures. And, whether through imports or through home market suppliers through U.S. affiliates manufactures based in a foreign country, or have already established long-term relationships with other U.S. suppliers. The climax of foreign manufactures inflicting United States is evidence. However, as transplant automakers increase their presence in the United States; foreign manufactures also increase their presence to supply the automakers, creating demand for new equipment and jobs in the U.S. economy.
Automotive parts imports from China will continue to grow and account for a growing share of U.S. automotive parts imports. Most likely, the U.S. automotive parts trade deficit with China will continue to grow over the next few years as...
Some analysts predict that automotive parts companies will continue to move production to China and other low-wage countries like India and Eastern Europe, in an effort to reduce costs and remain competitive (Shaiken, 1993).
Most automotive companies import their materials from foreign manufactures due to low cost compared to home-based materials. In the last decades many America automotive companies have moved to foreign countries to set up automaker plants. Actually, the price of materials made in the United States would be double in price compared to the one manufactured in Mexico, India, China and Bangladesh. This is because in these countries there are low wages because of available labor which result to cheap productions of materials for automotive companies. Therefore, it would be cost effective for a company to import materials from these U.S.-Affiliated firms in China or Mexico, and then assemble at affordable cost in the United States. It's said that engine exports from Mexico, mainly to Canada and United States hovered around four hundred thousand (400,000) in the year of 1980s, increased to one million three hundred thousand (1.3 million) between 1985 and 1989 (Shaiken, 1990). It's indicates the trend of business change due to low wages in Mexico, and cheap materials manufactured in Mexico. A vivid example in Ford Automaker, which has galvanized itself into the Mexico market and therefore, its plan United States receive all its materials from Mexico plant.
Secondly, the low taxation changed on the automotive materials when you import from a foreign manufactures, is most affordable and cost effective to most automotive companies in the United States. Sometimes, home-based automotive companies get tax break on their imports, as away to promote home-based companies. This actually encourages many automotive firms to import materials from a foreign manufactures.
Finally, not like the previous tendency in auto producers to export old equipment and manufacture outdated models for sale in secondary markets, eighteen (18) most of the newer component and assembly plants in Mexico are close to "state of the art" (Shaiken, 1993). For example, GM's Deltronics plant in Matamoros, is housed…
