Import and Export Essay Example | Topics and Well Written Essays - 1000 words

Import and Export - Essay Example Due to high GDP per capita income Kuwait is an attractive market for luxury and high end vehicles. Kuwait heavily depends on importing vehicles from other countries due to lack of manufacturing facilities and the value of auto imports rose to 23% during 2012 (Kuwaitstay, 1). We are focusing on exporting luxury car segment as its demand is very strong in Kuwait. In Kuwait due to high cost of production because of lack of resources and high cost of labor, manufacturing facilities for vehicles are not profitable, therefore almost all vehicles are imported from other countries (Kuwaitstay, 1). Our vehicles have great demand all over the world and in Kuwait because of high quality, engineering and economies of scale in production. 2. Logistics infrastructure elements important to our export and their significance. Infrastructure logistics elements that are important to export of luxury vehicles in Kuwait are transportation and communication facilities, public utilities, banking services a nd retail distribution channels along with presence of good quality court system, protection of intellectual property rights and standards (David and Stewart, 41). 2.1 Transportation infrastructure : Good Transportation facilities are very important because international movement of goods is highly affected by infrastructure without which shipment faces delays, merchandise gets damaged and leads to inappropriately packaged product. In case of luxury vehicles quality and time is utmost important and any delay or defect will not be tolerated by the customer and results in huge loss to the company (David and Stewart, 41). However in Kuwait transportation infrastructure is well developed with international standard airports, merchant marine and ports and terminals, well connected paved roads and good warehousing facility to store imported vehicles (CIA, 1). 2.2 Communication infrastructure : For international transactions smooth communication with customers and suppliers by different ch annels like mail, phone or digital and electronic media is crucial for smooth business transactions, sharing of information, product promotion, timely decisions and delivery of product and in different countries importance of different channels varies (David and Stewart, 62). Kuwait is a developed country with highly developed communications infrastructure. 2.3 Public Utilities infrastructure : Public Utilities infrastructure like electricity, water, sewage and gas are crucial for operating a warehouse and establishment of corporate office because lack of adequate and reliable supply of these things disrupt the functioning of business and increase the cost of operations (David and Stewart, 65). In Kuwait electricity and gas are cheap and easily available and water supplied by desalination is affordable and reliable with good sewage system. 2.4 Banking Service and Retail Distribution Channels : Banking system is critical for financial transactions and reduces the risk of internationa l business transactions and facilitates various services like options market hedging for hedging currency fluctuation risks. A well-developed retail distribution channel provides customers with product availability at convenience and proximity and helps a great deal in promoting the vehicle by store promotion and increase the point of