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

2826 Words Oct 29th, 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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Therefore there will not be a best cost-efficiency way to manufacture car, negatively impacting on U.S automobile company to maximize their profit. He also argue that foreign companies investing in Russia face high transaction costs, entering in long discussion with their partners (domestic car market, local and federal government, banks) is necessary in order to set up their cooperation. Generally, foreign company who interest in investing in Russia will face long time discussion or negotiation with their partner, initial projects revised and time consuming on discussion with local government. As a result, there will be leading to long delays and important gap between initial contracts and lately modified that U.S automobile management should be taken into account that opportunity cost as investment factor is also important.
The increase of corruption in Russia
The challenge for the U.S Company investing in Russia auto firm will have to face serious corruption issue. According to European Bank for Reconstruction and Development (2000) report that a third of firms doing business in Russia indicate that they are required to give bribes in order to do business and that will be deducted more than 4% to the whole cost of doing business. Guy

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