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The Advantages and Disadvantages of Having a Wholly-owned Subsidiary

An example of this can be found in Volkswagen, which was the leading importer into Japan and which had used a Japanese firm as intermediary for 40 years. When the company wanted to increase the level of units in 1992, it replaced the Japanese company and created a new sales subsidiary, Volkswagen Audi Nippon (Hennessey 300).

Different countries have different rules regarding even the possibility of a wholly-owned subsidiary, often related to issues of competition. Antitrust law was largely a U.S. phenomena until World War II, though a number of countries, such as Germany and Canada, had laws against unfair competition that were focused more on false advertising than on market issues. Many nations in fact had large, state-encouraged cartels dominating their industrial production, which was quite a different circumstances from that in the United States. Antitrust law was developed after the war in Germany, Japan, and in the developing European Economic Commission created in 1957. The signatories pledged to regulate anticompetitive actions within the Community and to outlaw the abuse of dominant market power. These articles are not implemented by the Commission of the European Communities. Antitrust actions have become an important part of the EEC as it has been implemented up to and after the target date for integration of 1992 (Schaffer, Earle, and August 530).

One of the purposes of the creation of the European Economic Community has been to reduce regulations and increase competition. A Europe without borders is meant to increase investment, and so the use of subsidiaries by foreign companies should be encouraged rather than discouraged as was often the case in the past. Yet it is still true that individual states are trying in some cases to maintain control and may seek to protect their own industries at the expense of foreign investors. France is a case in point. Support for the EC has been strong from most French ...

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The Advantages and Disadvantages of Having a Wholly-owned Subsidiary. (1969, December 31). In Retrieved 23:41, August 18, 2017, from
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