Import of Automotive Materials - Essay Example

Determining Causes and Effects Task Determining Causes and Effects Introduction Global marketing managers understand foreign markets that affect respective economies of importing countries. They can explain occurrences in the automotive industries during the importation of relevant materials. For example, they can explain the causes and effects of importing materials from foreign manufactures. Information on causes and effects is significant because it enables directors and stockholders to make decisions that improve their companies’ proceeds. Describe the major cause The main cause of the importation of automobile materials is the weakness of the economy of the importing countries. This creates instability in the respective local suppliers of the automobile materials. The entire automobile industry in these countries lacks adequate support from the government. For example, the Chinese government ensures that all its companies have relevant subsidies. These subsidies create favorable conditions that in turn make the companies export their automobile material to the other countries that are ready to import. Companies dealing with automobiles, for example, Detroit, have lost most of their market shares. This encourages foreign companies to increase their respective investments in the countries that import. They export materials to these countries because they already know that there is an available market. Citizens end up importing from these companies because of their dominance of both internal and external markets (Bossche, 2005). Describe a leading second cause Unavailability of necessary materials in the US is the leading second cause of importing foreign automotive materials. This is because US companies, for example, Chrysler shut their productions because of managerial issues. Other companies that wished to be local producers in the USA could not sustain their operations. Their respective administration could not address the relevant challenges in the production of the automobile materials. After sometime, most organizations that were in the automobile production material also shut their businesses. The presence of alternative business ventures also encourage corporations to move away from the production of automobile materials (Bossche, 2005). Describe two (2) other contributing causes. There has been a noteworthy decline in demand of automobile materials. The reduced demand discourages present companies in importing countries to engage in serious production of the materials. People who require using these materials are forced to import. It does not matter how long the importation processes takes because there are limited alternatives. Some other foreign countries ensure that the importation of their materials is affordable. This allows importation processes to increase because people experience the convenience, which they need (Bossche, 2005). The governments in the importing countries have no restrictions on imports. This encourages the general importation of the automobile materials. The processes of importing become fast for people who need the respective automobile materials. There is accessibility of these materials encouraging Americans to import the same materials. There are dominant stereotypes that suggest that materials from other foreign countries are better than the local ones. The belief in such stereotypes encourages most Americans to import the automobile materials. This is because these people wish to have superior automobile materials to use in assembling their vehicles (Czinkota & A, R. I. 2007). Describe three (3) effects of the cause on the economy. Countries that import automobile materials experiences unnecessary loss that in turn weaken its economy. This is because the automobile companies in the US have stiff competition from the foreign companies. Weak economies make their respective citizens experience undesirable lifestyles. The citizens suffer because they cannot access standers lifestyles that other strong economies provide. The importation makes the economy of the importing countries to be unstable in supporting its other industries related to automobile materials. This is because of the existent high costs of producing these materials in the respective importing countries. The economy makes other industries not to rely on it. This reduces the general development of the entire automobile industries (Bossche, 2005). Importations make their respective economies fail in sustaining its citizens. This is because there would be an augmentation in foreign spending, which is extremely expensive. This is because of several levy duties charged during the importation of materials. This also affects the economy in a negative manner because its citizens cannot depend on it (Czinkota & A, R. I. 2007). Describe three (3) effects on people. The importation of automotive materials creates fewer opportunities for employing citizens in the respective importing countries. People end up being jobless because there are minimal opportunities for them. They are forced to move to these other foreign countries to offer their expertise. The movement compromises on quality family time because some members will be far from each other (Bossche, 2005). There are possibilities that the imported materials have compromised standards. This endangers consumers from the US because they can get accidents. This is because of the differences in the roads found in the US and those in the respective countries of importation. Other effects on people include the inability to adapt to the imported materials. They will be used to familiar materials and in turn fail to adapt to using the imported materials in an easy manner (Czinkota & A, R. I. 2007). The importation makes citizens from the respective importation countries to have minimal development opportunities. For example, these people cannot create their own materials because they depend on materials from other foreign countries. The efforts of production of local material fail because of the lack of support from relevant bodies (Business guide to the world trading system, 2009). Include two (2) visuals that illustrate two (2) different claims. (International Encyclopedia of the Social Sciences, 2008) Table One highlights the movement of goods both imported and exported consequently highlighting the effects of importation. Table 2 highlighting percentage of exports (International Encyclopedia of the Social Sciences, 2008) Conclusion There are several challenges affecting global markets based on the diversity of participants. The automobile industry in the US does not have any exceptions. It experiences these challenges during its operations. Standards that regulate the importation of automobile materials are necessary. This is because they will reduce poor quality materials. Most of the effects of importing automobile materials are negative. Consequently, governments need to research aspects that cause this phenomenon. The research will be significant in enabling countries not to experience the negative effects of heavy importations on the economies of countries. References Bossche, P. (2005). The law of the World Trade Organization. Cambridge: Cambridge University Press. Business guide to the world trading system. (2009). Geneva: International Trade Centre UNCTAD/WTO. Czinkota, M. R., & A, R. I. (2007). International marketing. California, CA: Thompson. International Encyclopedia of the Social Sciences (2008) Retrieved from http://www.encyclopedia.com/topic/Imports.aspx Read More