The Exchange Rate And Auto Parts Manufactures

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The case study ‘The Exchange Rate and Auto Parts Manufactures’ shows two companies which are suppliers to the US automobile company DaimerCrhrysler, and that companies based outside of the US. As the consequence of the importing machines from the United States, companies faced difficulties based on the exchange rate fluctuations.
First company – SMS were faced difficulties with the exchange rate of USD and euro. The CEO of the SMS Elotherm company, Udo Pfeiffer, took measures to avoid the loss. He raise price in dollars to compensate the fall in the value of dollar, but finally ‘manufacturers were constantly pressuring machine tool companies to lower prices, not to raise them’.
Another example of company shows us a company that was much more successful than SMS, Keiper, which based in Germany and exporting metal frames for cars to the US. Company invest money in the manufacture in Canada, when the exchange rate of euro were equal to the US dollar. But there were some disadvantages of being based in Canada and it raised a costs of the Keipers work. In addition, company faced problems with exchange rate because the company still produces some parts in Germany and sent to US.

Every country has its own currency, which is a means of payment and allows various types of financial transactions within the country. However, between different countries is also necessary to make any cash payments or transactions. An exchange rate measures the value of one currency against the value

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