Over the last few years, car producers have found it difficult to set up their primary car assembly plant. It has been a challenge in determining the best site of car manufacturing industry. It is the obligation of a company to set up strategic decision. These strategies will see a forward movement of the company activities (Law 1982). However, such decisions have to be accounted from various factors such as production sequencing, markets, level of the relationship with suppliers, and the level of investment. Car manufacturers have to make a critical decision regarding a location that is well suited for car manufacturing. Nevertheless, the nearness of the raw materials of a car assembling industry is one of the factors that boost the survival of the business in the economy.
It is the responsibility of car manufacturers in a country to make long-term decisions. These decisions will see the company survive in the market. One of the crucial decisions the manufacturers must when setting the location of the industry is to check whether the area is suitable for future development. In this sense, a car manufacturer establishes an industry in a place where there inadequate land for future development, the expansion will automatically not happen because the land will not be enough (Rose 1971). Adequate land normally creates a space for future expansion of activities. Anticipated activities that ought to happen in the future should be well planned to maintain a smooth running of the organisation in the future. A car manufacturing company needs a large space so that it can be able to incorporate all the activities the company will use in the near future. For example, Nauru car assembling firm in Kenya is among the greatest cars assembling industry in Kenya that is an enormous challenge in expanding (Thomas 2007).
In spite of the truth that the enterprise is gaining a lot of customers in the country, car manufacturers have seen it as a big challenge in formulating good decisions that will make them the best car assembling industry in the country. India is growing as one of the largest automotive industry that is involved in automobiles. It is evident that is markets is growing abundantly because of it available assembled vehicle in the country. Therefore, this provides the sense its large area that promotes expansion seem to be the main factor that is ensuring extensive growth. Again, the company produces goods continuously without any problem (Ford 2003). This creates and maintains a flow of the wheels and the car manufactures in the market. It is also evident that there are the enough places to store the finished good, i.e. the wheels and vehicles in the market. Therefore, the initiator poor the owners of car manufacturing industry should make a decision that will make the industry enjoy its operations in the market (Nichols 2006).
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In spite of the fact that it is difficult to know what will happen in the set location in future, car manufacturers have to come up with a good plan that will cater for all the anticipated factors that may arise. Well-formulated procedures have to ensure that there is a well-set assembly industry (Industry 1980). Another factor that car manufacturers have to consider is political stability. In the sense there is no security in the location, no one will want to establish a car assembly plant. One must himself determine whether the place is friendly to the environment. For example, Nauru assembly industries had experienced some political instability as some people in the society did not want the company to continue in their place claiming that pollute the environment, i.e. noise pollution. One time they came in ambush and stole some of the industry materials, which they went and sold them to the competitors of the company. Therefore, this forced managing director of the company to call an emergency meeting that will try to see whether a suitable decision will be met (Bloomfield 1990).
The other thing the car manufacturers should consider before setting up a car assembling industry in the reputation of the people in the area. It is the obligation of the potential owners of the industry to conduct a research. This research will involve a number of activities such as collecting information about the response of the people in the society (Nieuwenhuis & Wells 2003). This will be enhanced by using the questionnaire where everyone will have to write on the spaces in the questionnaire. Once the potential owners of the business obtain that feedback, the next thing is to assess them. Finally, he will get the cons and the pros of the people in that certain society. Therefore, a potential manager has to make sure that he checks all these issues in order to continue with the establishment of business. For example, a Kagindu car assembly industry in Kenya started that business when it had carried none of the research that would enable them to move forward (Parker 2003). The establishing of the industry did not last for even one year because it received a lot of protest from the people in the society.
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Again, car manufacturers have to consider the size of market in the region. They must consider if there is enough market in the region before attempting to start a car assembly industry. For example, the Indian automotive industry has become one of the main industries in the universe (Babson 1995). This is because it has many customers all over the world. Its many customers have made it expand. It has been capable to multiply its entire vehicle because people have bought them. The availability of it market of its products has largely promoted its growth. This is where a person look at the income at the per capital income of people in the society. Some of the companies that have enjoyed the market in globally are Toyota in Japan, Mercedes-Benz in Germany, and Yamaha motors in Japans (Dohse 1993). The Mercedes-Benz group plans to increase its investment because of the increase markets of its vehicles and other products. Again, the Volkswagen groups aim in increasing produce since there is the available markets of their products in the market. Nevertheless, Yamaha group aims to increase producing and assembling their products because there is the endless market of their products in the market.
The market is a crucial factor that car manufacturers have to consider before setting up an assembling industry in any location. Normally, an enterprise cannot grow or develop at all when it does not have the ample market. When markets are not available for a certain product in the market, it may facilitate to the closure of the business (Pulignano & al 2008). Were late not for the ample some companies had such as Toyota, they would have closed for a long time. Therefore, car manufacturers or the potential owners of the car assembly industries have to be extremely aggressive in meeting these conditions to make sure the company survive in the near future. Again, they should have to assess both the active and the passive markets in the globe. Active customers are the person such as the retailers or the distributors who reaches the produced products to the customer (Webster 2002). The retailers have the capability to buy the industry products and bring them near to the customers.
The availability of the retailers in the location ensures that the assembly industry maintains the flow of the manufactured commodities. The distributors make sure the assembled products reach the customers at the right moment and efficiently. Therefore, this gives a reason why it is essential for the car manufacturer owners to evaluate this factor before setting the industry. The other essential thing that car manufacturers have to consider is the production sequence (Rausch 2007). This means the production methods that the people involved in converting a raw material in finished goods. Car manufacturers must be informed about the methods that are required to produce products. Failures of the parties involved in establishing the industry have to be exceedingly careful before starting an organisation. This is because the use of the wrong method may bring confusion and lack of meeting the goal of the company. Again, this would lead to the waste of both the resources and the human labour in the society.
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The practice of a certain procedure that is not effective and efficient in producing a final product in the industry may automatically lead to the closure of the industry. Therefore, car manufacturers have to try to evaluate whether the available production sequence to the growth of the business in the future (Jefferies 1969). On current to the past, car manufacturers were establishing an industry without following the right procedure. The traditional car manufacturing industries were not growing at all because of the reluctant of the owner to formulate procedures that were efficient. For example, when the Toyota industry started there was some crisis because of poor methods of doing things in the organisation. Were late, not for reviews of their procedures followed in developing their products, the company would be closed by then (Rappa 1994).
The level of investment may be another substantial contributing factor that is affecting the establishment of the company. Car manufacturers should be informed on the level of investment the industry may wish to perform. Investment is an item that is bought with money and is normally expected to be creating income. They should consider the level of investment since it has a lot of effects or influence the established industry (Sirakoulis 2012). There are various levels of investment; these are the ownership investment, lending investment and the cash equivalent. The ownership equivalent is the most profitable and volatile investment. Lending investment is another type that allows one to be the bank. However, the level of investment simply means the range of investment. Car manufacturers have to make correct decisions that will the forward movement of the company. The amount of money the car manufacturer is wishing to invest in the industry will determine the rapidness of the growth of the company. The investment with a small amount of money will determine the growth of the business in the industry (Sturgeon & Bank 2010). Therefore, it is the obligation of the car manufacturers to evaluate or assess the various levels of investment. They should also come up with the appropriate level that will see the growth of the business in the future.
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Another factor that car manufacturers should consider is the relationship of the suppliers. The lack of flow of the supply may lead to a decline or lead to the closure of the business. In the sense where the assembly industry is not receiving the raw materials in a constant manner, the industry may fail to reach or achieve its objectives (V 1990). Therefore, before starting a car assembly plant, the owners of the plant have to assess whether the industry is sufficient in producing the raw materials. A good relationship between the suppliers of the raw materials should be maintained in whatever reason so that the assembly plant can be able to grow extensively. For example, the Volkswagen group has significantly increased it sales in the market due to the constant flow of its raw materials in the company. Once the vehicles parts arrive in the industry, they are assembled into finished goods, which are later distributed in the market (Marshall 1953).
Other things the company car manufacturers should assess before setting up a car assembly plant is the availability of the basic commodities in the area. These include water among others. It is clear that no one can stay without the basic water especially the water and clothing. Water is normally used in the industries in running the machines. It is used in cooling hot machines I the industries. For example, water is used as the contributing products in assembling car in Nauru industry in Kenya whereby it acts as the boosting factor to the growth and the development of the industry (Shahin 2011). Transport is another factor that potential manufacturers or the starters of the business need consider in order for them to establish an enterprise that will meet the customer needs. Poor roads in a certain area may automatically lead to slow down or hinder the establishment of a car assembling industry. Therefore, car manufacturers must take this measure to ensure they follow proper mechanism to prevent them have poor management in the industry (M 2009).
Car manufacturers must have knowledge about a given area where one is willing to establish a car assembly industry. For example, the use of electricity is a critical contributing factor to the growth of any enterprise. Electricity is used to move machines in the industry. As evident in many cases assembling industries, electricity is used to integrate machines such as engines. The electricity is also used in running machines. On contrary to the past, industries such as Toyota have started using computer technology in running machines. Therefore, every location to set an industry should have a good place that is sufficient for the development of the industry (Lacetera 2012). A lot of research studies carried out by the assembly, and the automobile companies such as the Mercedes-Benz in Germany. Their presence shows that computer technology will become the main thing used in the future. For that reason, the car manufacturers have to gather all their knowledge about a certain place where they think would be suitable to the location of the assembly industry. The failure of the location will automatically be an obstacle in ensuring the success of the set industry (Dohse 1993).
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Finally, the car manufacturers should be informed about the labour distribution in the area where they anticipate would be an ideal location for locating the business. In the sense that there is inadequate labour in the region, this would prompt the car manufacturers to think otherwise. This is because the availability of labour will increase the production of good. This would create a continuous flow of the finished products of commodities in the region. However, the car manufacturers have to evaluate the level of skills and knowledge in order to determine the amount of wages to pay for the labour (Horike 1984). Normally, the car manufacturers have to make all these evaluation before coming about with a decision to establish a company or not. Based on the research studies done recently, many car manufacturers have campaigned for computerization in the industry. In conclusion, the information above stipulates the various factors that car manufacturers should consider in establishing a car assembly plant (Carson & Bonk 1999).