Who would’ve thought a Fortune Global 500 company would be looking at the United States as a low-cost manufacturing site? But with the dollar’s recent dismal performance on foreign exchange markets, Volkswagen finds it hard to justify importing to the U.S. market. The logical solution is either to start building cars inside U.S. borders or move production to a North American neighbor where exchange rates beat the euro and transportation costs are lower. From a Reuters article on BNET:
“If the dollar stays at its current level, one has to consider a factory in North America very seriously,” [chief executive Martin Winterkorn] said, according to a preview of the interview [with German magazine Focus] released on Saturday. The euro is near an all-time high against the U.S. dollar and Japanese yen, making it harder for European-made cars to compete with those produced in the United States and Japan [...]
Despite the potential for foreign investment and higher exports, however, it doesn’t make sense to hope the dollar keeps sliding. And thankfully, strong new economic data has helped the dollar rise from its record lows.
