Discuss The Advantages And Disadvantages Of Globalisation In The Car Industry

In 1886 the first petrol powered automobile the Benz patent Motorwagen was invented by Karl Benz. It was the first time in history that an automobile (car) was produced in production. It was the beginning of the car industry, what today has become one of the world’s most important economic sectors by revenue. Although the car industry has always been a huge Market it has mostly be regional, the past 30 years have enabled the car market to gain growth through globalisation. These factors were a result of a market that started to transform globally: Foreign Direct Investment or (FDI) which is an investment made by a company based in one country, into a company based in a another country. Large FDI flows come from the huge amount of low-cost labour forces in Brazil, China and India, strengthening both local markets and developed countries. Furthermore global production and cross border trade have accelerated. Another change in the car market around the 1980’s was the increased outsourcing in the car market which resulted in increased trade and FDI for developed countries. Also the developing countries profited through this by increasing their

Advantages like creating working places for people in developing countries, building businesses in developing countries enabling the country to grow resulting in wealth equality. Strengthening partnerships between countries and organisations resulting in more stable relationships between countries. But, Yes, globalisation in the car industry also has its disadvantages. As car companies started moving to developing countries where labour forces were cheaper, people in the original country of the company started losing their jobs. Also working standards laws are often not regulated in developing countries and can cause terrible working conditions. Also the environment has suffered under the need for energy in all the factories and the shipping of car parts around the