Global Crisis

Topics: Subprime mortgage crisis, Tata Motors, Financial crisis Pages: 5 (1649 words) Published: August 25, 2009
Global crisis occurs due to financial crisis and economic crisis. These are nothing but risk that could threaten humankind as a whole or even cause the end of planet Earth. A financial crisis is a situation where money demand quickly rises relative to money supply. A stock market crash is an example for this. Whereas economic crisis refers to the economic down of countries all over the world. They are going down in -ve zone.

Global economy has become a hot topic for international forums. It believed that the value of IT off shore consists of better process management of operational skillfulness. So, they should put effort in developing technology platforms to make business more efficient.

The Major concern in India today is global financial crisis is leading to severe recession, In the real economy. It started showing in the effects middle of 2007 and it to 2008. Various sectors like steel, fertilizers, financial things, banking. Now Indian Government was taking considerable step for this global crisis in the next year i.e; 2010. We can see 9% rises in global economy.


In June 2008, Tata motors has acquired the Jaguar land Rover business from ford motor Company for $ 2.3billion bridge loan to fund this JLR buyout. And $2 billion of that is still due they had to make repayment in June. Total borrowings from bank of working capital are already Rs. 9,600 crores. Now Tata Motors debt is twice its net worth.

Now Tata motors needs lots of money to pay back the loans. Finally they came up with the cheapest card “Nano “. But they have no cars to give. The strategic move of Tata Motor is “cash first car later”. This brought them much needed cash. But this is not going to solve the problems. The Nano Project requires an investment of Rs. 2000 crores. It needs another Rs. 2,300 crore to fuel its operations. IN India due to economic crisis there is down turn in the commercial vehicle market which caused loss of 263.3 crore in the third quarter.

Well coming to the Jaguar the sales has raised 26% on the last year but that land rover fell 33% in the same six months period. This hasn’t made things any easier for TATA motors. But there is a way out for TATA Motor to rise up to Rs. 2,500 crore through stoke sales in subsidiaries like Tata-Daewoo, Tata constructions and Tata technologies to repay the JLR bridge loan. But this is not the best option at this market condition. It was tough time for Tata to raise the funds, production constraints, tough competitors from Toyota & Bajaj Renault and further cancellation of NANO CAR.

The Nano booking tata motors helped them a lot. Hope this will work out for tata motors. Due to this economic crisis following factor took place:

Poverty has increased rapidly due to an increase in value of food & other expenses

IT Companies reducing their man power due to this UN employment has increased.

The value of goods like gold, land ------ are increases since the value of rupee has decreased.

| | |The vision of making India an international industrial hub requires an assessment of the critical issues | | | |faced by the industrial sector and hence the development of strategies to face future business scenarios. | | | |This study finds that the demand for superior quality, lack of infrastructure, rising labour cost and | | | |indifferent government policies are the current challenges for the manufacturing sector, and factors such as| | | |better technology, access to global markets, global competition and increased foreign partnership | | | |characterise the future business environment. On the other hand, the services sector faces challenges in the| | | |form of lack of skilled employees and restrictive government...
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