Huyndai and Kya case study international business - Research Paper Example

Huyndai and Kya case study international business Yes, Hyundai should still expand in the US because a rise in the value of the won imparts the need to manufacture the cars in the US rather than in Korea, particularly when the value of won is forecast to rise further in the coming years. The only thing Hyundai needs to make sure is to expand itself in the US just to the optimal level, below or above which, sales get less profitable. “Bank of England research suggests that a10% depreciation in the exchange rate can add up to 3% to the level of consumer prices three years after the initial change in the exchange rate” (Riley).

The more value the won gains, the more expansion Hyundai should seek in the US. So far, although won is gaining strength in comparison to the US dollar, yet it is still below the value of US dollar (“Latest Exchange Rates”). So it would not be feasible to completely shift all of its manufacturing plants in the US. However, the point at which, if ever, won gains more value than the US dollar, then Hyundai should completely shift its manufacturing plant to the US. Besides, currency movement is not the only factor that drives Hyundai’s motivation to expand its presence in the US.

The company might want to expand its presence because its main customer base happens to be the Americans. As it expands its presence in the US, reduced cost of transportation, more knowledge of the local market in the US, and availability of advanced technology would more than compensate for any costs incurred in the process of expansion in the long run. Works Cited:“Latest Exchange Rates: 1 United States Dollar = 1,118.34912 South Korean Won.” 2013. Web. 24 Mar. 2013. . Riley, Geoff. “Exchange rates.

” 23 Sep. 2012. Web. 24 Mar. 2013. .