Financial Education - Inflation rates production levels and gross domestic product

Globally, companies that manufacture parts and components for vehicles are mostly located in developed countries with significant inflation rates, that is, countries where production levels or gross domestic product is very high.

This means that the inventory turnover of these companies is accelerated, this is due to the demands of the countries where they are being used or where certain models of vehicles or automobiles are in circulation.

There are different variables that are sometimes very difficult to explain and understand, it is evident that the states that are going through high inflation and in constant variations in price increases and uncontrolled prices and coupled with this the lack of production, raw materials, high acquisition costs.

Taxes on transactions, the collapse of the local currency, government controls, violations of rights, speculation, lack of fuel, unscheduled and unplanned deficiencies in the electrical system, the lack and poor quality of internet supply and other problems that greatly affect the development of the country.

In this way, the operations are paralyzed in terms of purchases and sales of the companies dedicated to this automotive industry, due to the paralysis of the national production, the companies must import and here is where another problem is generated that ends up paralyzing the inventory of the company, that is to say, there is no rotation of the same.