Tata Motors in Trouble


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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:

Price:
Case Code : BSTR314 For delivery in electronic format: Rs. 300;
For delivery through courier (within India): Rs. 300 + Rs. 25 for Shipping & Handling Charges

Themes

Competition/ Collaboration/ Entry strategy/ Expansion strategy
Case Length : 18 Pages
Period : 2007-2009
Pub Date : 2009
Teaching Note : Available
Organization : Tata Motors
Industry : Automobiles
Countries : India/UK/US

Abstract:

The case highlights the problems faced by Tata Motors, the largest automobile company in India. In late January 2009, Tata Motors was reeling under a severe business and financial crisis. The company had acquired Jaguar and Land Rover (JLR) from the US-based Ford Motors for US$ 2.3 billion in June 2008. To finance the acquisition, Tata Motors raised a bridge loan of US$ 3 billion from a consortium of banks. By the end of January 2009, Tata Motors was yet to pay around US$ 2 billion towards the bridge loan. Moreover, JLR needed further investments, that too quickly, to keep the operations running. Besides this, the commercial launch of Tata Motor's small car Nano required much more time than anticipated.

With the Indian economy showing no signs of revival soon, there seemed to be no immediate possibility of an increase in domestic demand. The Managing Director of the Tata Motors was left wondering if the worst was over for Tata Motors and what he should do to revive the company's performance.

Issues:


» Understand the impact of macroeconomic factors on the business.

» Analyze the recent developments in the global economy due to the ongoing sub-prime crisis and the resultant global financial turmoil.

» Study the effects of global economic slowdown and its impact on the global automobile industry.

» Critically analyze the problems faced by Tata Motors and suggest probable solutions.

Contents:

  Page No.
Tata Motors Reports Loss 1
The Acquisition of JLR 3
Financing Issues 4
Problems with the JLR Deal 5
Problems in the Domestic Market 7
The Nano Project - A Nightmare 8
Is the Worst Over? 9
Exhibits 10

Keywords:

Tata Motors, Sub-prime crisis, Jaguar, Land Rover, Nano, Economic Slowdown, Recession, Business Revival, Acquisition, Funding Problems, Global financial crisis, Financing the acquisition, Differential voting rights, Indian Automobile Industry, Global Automobile Industry

Tata Motors Reports Loss - Next Page>>

 

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