Abstract
We are going to explore the possibility of shifting the production from Germany to a country either in ASEAN, NAFTA or MERCOSUR region, in order to reduce the cost of production. The countries that have been chosen are Brazil, Singapore and Mexico. Brazil has the highest GDP of Latin America and is an emerging market, with its international financial and raw materials market lead from the forefront. Its exports are mainly aircrafts, automobiles, soybean, orange juice, coffee, textiles, ethanol, footwear, corned beef, iron ore, steel and electrical equipment. Brazil's economy is a moderate free market and is export-oriented. Singapore is a highly developed economy based on a free-market system, where naval trade has been significant throughout the history thanks to its strategic port. Its economy depends basically on exports, especially in manufactured products such as electronics, petroleum refining, chemicals, mechanical engineering and biomedical sciences manufacturing, from where it obtains its revenues to purchase natural resources and raw materials which are transformed to be re-exported. It also has an open business environment; transparent stable prices and relative corruption-free. In terms of tonnage shipped, Singapore is the busiest port in the world. It is also the fourth largest foreign exchange trade centre after London, New York City and Tokyo. Mexico is an upper middle income country with free market fixed economy. As measured by purchasing power parity, Mexico has 12th largest economy all over the world. Mexico is very open to foreign investors and has lots of free trade zones, which make it very attractive to investors. The Car industry in Mexico is very developed with high quality. The most important car manufacturers in Mexico are, General Motors, Ford, Chrysler, Volkswagen and Nissan. Mexico is still attractive for car manufacturers desirous of building a plant, as many suppliers have moved to Mexico from Asia and Europe. Not only the car industry, but also other industries that produce low prices materials have a very high export level in Mexico. The country that was chosen to position the new manufacturing plant in is Mexico. The reason for this is that labor is cheap though the level of education is adequate. Furthermore in the area where the new plant will be positioned there is good infrastructure, and because it is a free trade zone, no tax has to be paid. Also, Mexico is big when it comes to the automotive industry which may give rise to future opportunities to Autotainment. The forecast is made for five years with the begin year being 2009 and running till 2013. There is expected to be a profit from the first year (2009), even with the extra costs that are incurred by moving to Mexico. During the five year forecast the retained earnings of Autotainment will continue to grow as the overall sales increase over the years. The estimated budget for the new manufacturing plant is Mexico is 60,000.
