US Dollar Down, Foreign Investment Up
April 2, 2008 by Jean Mercedes
Filed under Business
The US Dollar has fallen 40% against the Euro since 2001. Purchases made in the US are a bargain for anyone with Euros.
More and more European companies are setting up or expanding their US holdings to take advantage of the exchange rates. In effect, the US has become a “low-cost country” (LCC) for businesses based in Euro.
Bernd Matthes, president of BorgWarner Transmission Systems reports “The cost advantage in the US is at least one-third compared to Europe.”
Other examples from the automotive industry:
- Alfa Romeo is looking for a location to produce vehicles in the US.
- Ditto for Volkswagen
- BMW will invest $750 million to expand it’s Spartanburg, SC facility to produce an extra 90,000 vehicles.
Exchange rates are extremely hard to predict, but the Dollar is not expected to make a strong return any time soon. That’s what these European companies are betting on.
How about your industry? What foreign investment have you seen coming into the US because of the low Dollar?
Data and Quote from Automobilwoche.
