Case Study : Global Auto Parts Distribution

Title: "Precision and Responsibility: Exporting Auto Parts Globally"

Description:

Auto GlobalParts, a leader in automotive component manufacturing, has to fulfill a contract with several international clients who have placed large, time$-$sensitive orders. The shipments include a mix of ready$-$to$-$install parts and components requiring further assembly. Auto Global Parts needs to ensure that the terms selected minimize their liability for potential damage during the long transit without compromising delivery timelines. They are evaluating whether DAP $($Delivered at Place$)$ offers the best balance between cost and responsibility or if CIP $($Carriage and Insurance Paid to$)$ would be more prudent given the value and fragility of the goods.

Questions:

What are the key considerations for Auto GlobalParts in choosing between DAP and CIP for their international clients?

How do the risks and obligations of Auto GlobalParts differ under DAP compared to CIP?

What might be the long$-$term implications for customer relationships based on the chosen Incoterm?