Thursday, May 5, 2016

Today, the car manufacturing industry takes up an a huge amount of the worlds exports in services, ranking only behind fuels, and chemicals.  With that being said, I felt that this picture can really show what an immense effect that globalization has in this business.  The parts for many of these cars are being manufactured in numerous different countries across the globe and then most likely even assembled in a different one.  With this large amount of GDP locked up in the automotive industry each year, all of these countries take part in the benefits.  Another interesting aspect to this picture is the reasoning why all of these parts are being made in different places.  Depending on a countries resources and skills, They are mostly only producing what parts they have a comparative advantage in.  In other words, they produce whichever parts they can produce better, and cheaper than the rest of the globe.  They then can just trade the profits of those towards something that they did not have a comparative advantage in, such as a bumper in this case.

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