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Instructions  :
each question it’s answer in 1 page or more.
 WORD format only 
 All answered must be typed using Times New Roman (size 12, double-spaced) font.  
without plagiarism 100%free 
 must mention question number clearly in the answer.

_________________________________________________________________________________
read Case 8: “Volkswagen in Russia”, and answer the following questions:
  
Assignment Question(s): 

What factors underlay the      decision by Volkswagen to invest directly in automobile production in      Russia? Why was FDI preferable to exporting from existing factories in Germany? 
Which theory (or theories) of      FDI best explain Volkswagen’s FDI in Russia? 
How do you think FDI by foreign      automobile companies might benefit the Russian economy? Is there any      potential downside to Russia from this inflow of FDI? 
Russia is largely dependent on      oil exports to drive its economy forward. Given the sharp fall in global      oil prices that occurred in 2014 and 2015, what impact do you think this      will have on FDI into Russia? 
Volkswagen has signaled that it      is going to stay the course in Russia, despite current political and      economic headwinds. Why do you think it made this decision? What are the      pros and cons of this decision? In your opinion, is it the correct      decision?618 Part 7 Cases

4. Government support programs for sugar producers
were introduced in the 1930s, yet they are still in
place today, long after the original rationale disap-
peared. What does this tell you about political deci-
sions relating to international trade?

5. If you had the power to make changes here, what
would you do and why?

Case Discussion Questions
1. Who benefits from subsidies to U.S. sugar produc-

ers? Who loses?
2. Do the benefits of U.S. government support to the

U.S. sugar industry outweigh the losses?
3. What do you think would happen if the U.S. govern-

ment removed all support for U.S. sugar producers?

In the mid-2000s, Volkswagen announced that it would
invest directly in automobile production in Russia. The
decision to invest was driven by a number of factors.
Russia’s economy was growing rapidly at the time and
living standards were rising, while the level of car owner-
ship per capita was still low by European standards. This
suggested that demand for cars would grow rapidly going
forward. Indeed, forecasts predicted that by 2020, Russia
would surpass Germany to become the largest car market in
Europe. Moreover, Volkswagen’s global rivals, including
most notably Toyota, General Motors, and Ford, were also
investing in production facilities in Russia, so Volkswagen
felt that it had to make direct investments in order to
avoid being preempted by its rivals.

The Russian government also created incentives for
carmakers to invest directly in Russian production facilities,
allowing them to avoid import tariffs and a punitive tax on
imports of parts if they produced at least 25,000 cars in the
country. In 2011, the government announced that it would
keep tariffs on imported components at 0.3 percent if a for-
eign automaker built at least 300,000 in the country by 2020
and produced 60 percent of the value of the car locally.

Spurred on by such incentives, in 2007 Volkswagen
opened a plant in Kaluga, 160 miles southwest of Moscow,
to build some of its VW and Skoda car brands. The plant
was projected to have a peak capacity of 150,000 units a
year and employ 3,000 people. Initially, all vehicles at the
plant were assembled from semi-knocked-down kits im-
ported from Germany. In October 2009, however, the
plant launched full-scale production, including welding
and painting of vehicles. In October 2011, Volkswagen an-
nounced that, together with a local partner, GAZ Group,
it would open a second plant near St. Petersburg as it
strove to reach the 300,000 units of local production by
2020. In 2013, Volkswagen made an additional invest-
ment in Kaluga when it pledged €300 million to build an
engine plant near to its assembly operation. The engine
plant opened in September 2015.

All told, by this point Volkswagen had invested more than
$1 billion in production in Russia. General Motors and Toy-
ota had also announced investments of more than $1 billion
to boost Russian production upCollege of Administrative and Financial Sciences

Assignment 1

Deadline: 17/10/2020 @ 23:59

Course Name: Intro to International Business

Student’s Name:

Course Code: MGT-321

Student’s ID Number:

Semester: I

CRN:

Academic Year: 1441/1442 H

For Instructor’s Use only

Instructor’s Name:

Students’ Grade: Marks Obtained/Out of

Level of Marks: High/Middle/Low

Instructions – PLEASE READ THEM CAREFULLY

· The Assignment must be submitted on Blackboard (WORD format only) via allocated folder.
· Assignments submitted through email will not be accepted.
· Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page.
· Students must mention question number clearly in their answer.
· Late submission will NOT be accepted.
· Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.
· All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism).
· Submissions without this cover page will NOT be accepted.

Assignment Regulation:

· All students are encouraged to use their own word.
· Assignment -1 should be submitted on or before the end of Week-07 in Black Board only.
· This assignment is an individual assignment.
· Citing of references is also necessary.

Assignment Structure:

A.No

Type

Marks

Assignment-1

Case Study

5

Total

5

Learning Outcomes:

· Identify the major components of international business management (Lo 1.2)
· Explain the forces driving and evaluate the impact of globalization (Lo 1.3)
· Discuss the reasons for and methods of governments’ intervention in trade (Lo 1.7)
· Carry out effective self-evaluation through discussing economic systems in the international business context (Lo. 3.6)

Case study

Please read Case 8: “Volkswagen in Russia” available in your e-book (page no.619), and answer the following questions:

Assignment Question(s): (Marks: 5)

1. What factors underlay the decision by Volkswagen to invest directly in automobile production in Russia? Why was FDI preferable to exporting from existing factories in Germany? 
2. Which theory (or theories) of FDI best explain Volkswagen’s FDI in Russia? 
3. How do you think FDI by foreign automobile companies might benefit the Russian economy? Is there any potential downside to Russia from this inflow of FDI? 
4. Russia is largely dependent on oil exports to drive its economy forward. Given the sharp fall in global oil prices that occurred in 2014 and 2015, what impact do you think this will have on FDI into Russia? 
5. Volkswagen has signaled that it is going to stay the course in Russia, despite current political and economic headwinds. Why do you think it made this

  
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