Russia, Germany, China -which country is best choice of U.S automobile company investment?

2827 Words Oct 25th, 2013 12 Pages
Russia, Germany, China -which country is best choice of U.S automobile company investment?

Executive Summary
This report will deeply analyze the benefits, costs and risks associated with doing business in China, Russia and Germany. Through comprehensive evaluation the three countries’ macro environment, it deems China is the most attractive target for foreign direct investment. It is sure that China is an emerging market which has great potential demand for automobile products. Therefore, the automobile company should consider investing in China if it wants to enlarge its business.

1. Introduction
In recent years, with the development of economics, the
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All of which are not conducive to the development of the new entrant in market.

2.2.1Benefits investment in Russia
The average revenue of Russians is higher than Chinese. The high revenue and slow life pace in Russia decides lots of Russians have a keen interest in buying a private automobile. According Libor Krkoska and Alan Spencer (2008) report that the Russian economy has experienced a period of rapid economic growth due to the benefit of increase in oil prices since the August 1998 crisis. The level of per capita income of the population rapidly increased because of both salary increases and the expansion of consumer credit, which expands availability of consumer that obtain enough finance to support their car purchases.

Automobile industry occupies the dominance status, the technology is mature and it has lots of skilled and knowledgeable workforce, if the U.S automobile company select in investment in Russia, it is sure that the new technology and talents in Russia can benefit the innovation of the company. The scholar of Hill.C (2013) also believes that firms through the innovations in products and process will create significant economic value and boosted productivity. Therefore U.S automobile are able to become more competitive in fierce global market.

2.2.2 Cost and Risk in Russia
The potential policy risk in Russia car industry
Xavier Richet (2003) also thought

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