Question

Ford had no presence in India before 2005, but it used the __________________ approach to open its own first manufacturing unit in Chennai to take advantage of opportunities in India.
A) direct investment
B) joint venture
C) contract manufacturing agreement
D) licensing agreement
E) franchising agreement

Answer 1

Answer:

Letter A is correct. Direct investment.

Explanation:

Direct Investment or Foreign Direct Investment is defined as international investment for the purposes of creation and operations in another country. This type of investment may establish a majority or minority interest in companies that give the investor control over the operations and activities of that company.

In the case of the matter, it involves the Ford company whose direct investment was made in India to open its own business operations in India.

It is a type of complex investment, often used by companies wishing to establish a commercial presence in foreign countries, so it involves not only capital and interest, but management systems and technology.