Eventually Mr Misato chose to build his car assembly plant in the UK. Suggest two reasons why (2 marks)
1. He does not need to pay EU taxes on exports to Europe
Costs for labourers and factory workers is cheaper than in Japan
2. Because then he has a wider market at which to sell products
Tax and costs of transporting the goods are reduced significantly
3. The UK is in the EU so he could bypass EU tariff and avoid having to pay heavy tax as foreign countries bringing products into the EU
EU labour charges are cheaper so the cars will be made more cheaply so it can be competitively priced.
4. Europe provides a large market in which to sell. UK is in this.
Japan's materials are all shipped in some from the UK, you can reduce this expense.
which of these answers is the best?
What is wrong with the last answer?
Factors to include:
1. Bypass EU tariffs - any manufactured goods made outside the EU but sold within have to pay tax. By locating the company within the EU no levy is paid therefore cars are priced competitively
2. Transport costs are lower for bulky items.
3. Labour charges are lower in the UK than in Japan. This leads to lower production costs and thus competitive prices.
4. EU provides a large market - >300 million people
5. In certain locations regional aid is available to assist with establishing the factory
6. Imported Japanese goods need adaptations to meet EU regulations therefore it is easier to construct the vehicles near where they are to be sold.