Tata Motors in Trouble
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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.
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Case Details: |
Price: |
Case Code |
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BSTR314 |
For delivery in electronic format: Rs.
300;
For delivery through courier (within India): Rs. 300 + Shipping & Handling Charges extraThemes
Competition/ Collaboration/ Entry strategy/ Expansion strategy |
Case Length |
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18 Pages |
Period |
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2007-2009 |
Pub Date |
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2009 |
Teaching Note |
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Available |
Organization |
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Tata Motors |
Industry |
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Automobiles |
Countries
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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.
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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:
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
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