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Essay heading: Volkswagen Expansion
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Business |
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| Date added: |
August 5, 1999 |
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3 / 750 |
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Also, the biggest portion of DM denominated debt was another risky issue, considering the volume of revenues in softer currencies (revenues from the US market).
1976-Mid1980s: Although it aimed at reducing DM - US dollar volatility risk, the introduction of the Puebla plant as a supplier of US market, VW added another currency risk that came from the peso-dollar exchange rate...
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Also, the production in Mexico was less efficient than in the US in terms of volume on a production time basis.
Mid1980s-1992: VW closed its US Westmoreland plant given its low capacity utilization in 1987 and prospective market growth and resumed the supply from Germany. This decision initially meant producing in a hard currency (DM) to supply a soft currency country (US dollar), a non viable option in a market with price elastic demand...
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