Overview of the Auto Manufacturing Sector

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The Auto Manufacturing Sector One of the defining features of globalization is the clear line of separation which this has drawn between preferable venues for production and sensible outlets for retailing. The automobile industry is one sector which has been especially impacted by this dichotomy, primarily because of the high cost of its primary retail output and the need to reduce the costs which are required to deliver it to market. It is thus that auto manufacturers have increasingly used a specific set of determinants for where to locate factories or, alternately for destination countries in which to commission existing factory facilities. This is because several factors which have always been critical to the mathematical equation of profiting from auto sales are today of even heightened influence. Specifically, with the deconstruction of trade barriers on a global scale, a wide range of new and evolving manufacturing markets in the developing sphere have heightened the competition among auto-makers to cut costs and raise profit margins. Therefore, when choosing a manufacturing destination, several cost-determining factors will be of central consideration. Labor costs are an important issue for auto-manufacturers, who will often choose a production destination where the national wage standards are either decidedly low or have no protections at all. Here, profit margins can be improved through aggressive reductions in the cost of overall labor. Another major
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