Essay on International Trade
By definition international trade is the exchange of goods and services including capital across and between countries either within the same region or outside in an attempt to increase on profits thus giving a rise to the world economy. Looking at the automotive industry, there is need for sustainability which is apparently why the issue of electric vehicles emerged. With the climate change act, the UK is bound to reduce greenhouse gas emissions by 80% by the year 2050. With this move, electric cars would go a long way in attaining this. The automotive industry over the years has been working on improving production and design of cars and even with the clean fuels, emission rates of carbon are still high (Bailey, 2010). This is important for James Dyson as it will not only enable him to bring the electric vehicles into the market but the design that will sell in the market.
While imaging a world of electric cars as the world has become dependent on electric systems, this industry forms 4% of the UK gross domestic product while employing 700,000 people. The design should be smart in such a way that it does not present flaws putting in mind that these cars come at a higher price than the ones being used currently (Sperling & Gordon, 2009). Since many nations are involved in manufacturing of cars, there is need for Dyson to obtain an intellectual property right so as to protect his patent. To meet consumers’ expectations and range, a substantial design of the electric cars needs to be met. With the new models being taken up by competing plants, Dyson organize his productivity in such a way that he can serve the local market.
This is because the major producers competing in the market are majorly focused in serving other markets outside the EU such as the United States, Japan, and China. This opportunity when effectively utilized will provide Dyson with a competitive advantage in the market over other producers. Vehicles production has risen in the UK by 16% margin thus a strong contributor to the country’s GDP as compared to the 40% decline that Japan recorded in the same time. Being the major producer and supplier of electric vehicles for the EU, the decline means that the supply will not stand to be the same thus there will be need for an external option to meet the supply gap as the demand did not change.
With these weaknesses and setbacks to the automotive industry, marketing is essential. To begin with, potential markets needs to be identified majorly on a local and regional scale to reduce the gap that the decline in sales in major markets has widened as the annual sales still remain below trend not only in the UK but also in Japan and the United States. Effective marketing strategies are therefore important to boost sales ad save on costs associated with overproduction. Dyson therefore should consider other options to ensure that he makes a relatively profitable sale out of the new product line that he intends to introduce. Some of the best available alternatives include intensive marketing of the product in local and regional markets, the use of credits and promotions such as offering spare parts to customers who make earlier purchases.
Since labor represents the larger production component alongside capital, production in Mexico will cost Dyson lesser out of which selling the electric vehicles at an affordable price in the UK will still ensure that profit is made at the end of the sale (Mexico factsheet, 2016). Basically, this proves marcatianism as UK’s gain comes at the expense of Mexico which is not only offering cheap labor but also does research on technologically complex automotive vehicles which they build in other countries cars rather than their own. This is because labor is a significant competitive factor as it plays a major role in higher markets such as Germany whose labor cost per hour is at $29. For Dyson, adjusting output to demand should be his priority as this will not only ensure he has a competitive advantage in the market but will also monitor the increasing competition for this consumer product with the lowest consumption.
The comparative advantage of consumer electronic industry is based on the producers’ ability to integrate automatic systems such as parallel automatic parking assistance based on sensors. This is because Brexit brings about creation of value, mobility of labor, quality increase and improved living standards thus its implications includes shifts in trade relationships leading to financial markets redeployment. This may further lead to the need for renegotiations of deals which may not work very well for the EU and the UK. Moreover, there will be a decreased consumer confidence among Britons which will bring about periods of struggle based on export trade tariffs. Conclusion With the increased levels of plants closures, electric vehicles when produced in regards to the demand is profitable.
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