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Old 5th February 2009, 10:21   #1
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Default Tata Motors, financial trouble?

Tata seems to be getting into financial trouble. Looks like they have acquired Jag /LR at the wrong time. Nano could have easily saved them, but for the West Bengal govt. Bad timings. It is a resilient company, hope it will come out of this problem sooner.

Tata Motors fails to pay vendors, suppliers- Automobiles-Auto-News By Industry-News-The Economic Times
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Old 5th February 2009, 10:30   #2
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Its bad news and I really wonder if the recession has not yet affected us. The sales are not good, they acquired Jaguar and Land Rover rather aggressively and then they had to move out of W.Bengal. In west bengal, IIRC, they never paid good money for that land, but rather they will now have to spend on moving the equipment to Gujarat. Surely Tata is hit right now.
The real shocker is the amount that goes upto as high as Rs. 1200 Crore. It looks like they had delayed the payment since long. Overall I think that TATA group has sufficient finances available to pay this and they can come out of this, but this creates a negative impression on suppliers and vendors and on the customer also. The customer will think that what is the real status of the company ,etc.

I havent heard anything like this for Suzuki, Honda or Toyota till now. Sincerely hope tata takes care of this and in the end the automotive division is not affected.
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Old 5th February 2009, 11:09   #3
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Looks like bad times for Tatas - always getting publicity for the wrong reasons. Hope they get out of the bad publicity mess asap.
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Old 5th February 2009, 11:27   #4
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Seems Nano is there to help TATA out.

I read in news paper today that, Nano booking is about to start in few days.

Booking can be done by paying 70000 Rs.

Now TATA expects around 1 lac bookings.

So, its a 700 crore sum, TATA will have in only few months. LOL
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Old 5th February 2009, 11:30   #5
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For the same reason they have brought public FD of rs 1200Cr and giving attractive rates of 13.5 % for the share holders.

They have new vista + new indigo which might help them and yes nano sooner the better.

Tata is the only name in current automakers which have social background .

Hope they are back on track soon.
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Old 5th February 2009, 11:36   #6
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The worst thing is that the slump has hit his cash cow TCS as well. Earlier whenever Mr. Tata wanted cash, diluting a mere 1% of TCS holding would have given him enough. But times are changing and there is no silver lining ahead!
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Old 5th February 2009, 12:33   #7
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From what I can see, the Indica continues to be one model that people are continuing to buy from Tata - I havent seen too many of their new vehicles - Vista/Grande on road. Their current predicament seems to be due to a series of bad business decisions (some owned, others forced on them) and ill-timed and lukewarm product launches.
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Old 5th February 2009, 12:47   #8
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I am seeing some Vista, Grande and very few Indigo XL on Kolkata roads. Probably because I am conciously trying to find one!!
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Old 5th February 2009, 14:22   #9
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Default Tough times

This is bad news and is compounded by the fact that the negative publicity can deter potential customers. I hope that Tata comes out of this rut fast and unscathed.
A lot is pinned on the Vista, I hope it is able to improve its sales performance in the next few months.
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Old 5th February 2009, 14:23   #10
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Quote:
Originally Posted by VooDoo View Post
The worst thing is that the slump has hit his cash cow TCS as well. Earlier whenever Mr. Tata wanted cash, diluting a mere 1% of TCS holding would have given him enough. But times are changing and there is no silver lining ahead!
Once TCS went public (15% diluted) as far as i know it has never increased its dilution since then. It still continues to be at 15%. Although there were thoughts of listing on Nasdaq but it never happened.
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Old 5th February 2009, 14:31   #11
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Agreed, there are not many Vistas & Grandes on the road, but I don't think you could equate that to non payment to your vendors/suppliers. These vendors/suppliers in turn would not have paid their suppliers and so on. This is not at all a good sign for a company like TATA. I just hope they get out of this one without serious damages.
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Old 5th February 2009, 14:51   #12
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No intentions to open a can of worms here but I wonder what mamta bi would have to say about this!
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Old 5th February 2009, 15:03   #13
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Tata Motors stocks are tanking in the market from 180 in dec it is below 135 now.
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Old 5th February 2009, 15:15   #14
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Guys, would anyone be knowing how many weeks (or days) purchase this represents? I'm wondering if its such a big deal or is it just a conscious decision to stagger payments & some vendors have reacted by coming out in the open?
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Old 5th February 2009, 15:17   #15
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This problem is not only with TATA... we have dealing with Honda and Nissan here in the UK and both companies are doing simliar things, as are alot of other Manufacutres. Yes it gets worse further down the chain and we have to keep re-sourcing work because of suppliers going into administration. Honda recently said they would only pay for tooling and other capital after the 'Job 1' stage. For most instances this is 4years after a suuplier has speant the money. My company has already said they will not be able to handle those sort of financial implications.

Its a vicious circle - OEM's refuse to pay suppliers until a later date or want 90 day credit. This hurts the supplier and they say no. The OEM thakes their business elsewhere, the supplier shuts because of the late payments, and the OEM does the whole thing again with another supplier.

Things are really hard within the automotive industry here in the UK, and we belive its still not hit India in the same way. Lets hope it doesnt.

TATA bought Jaguar and they also have to inject more money to bail out the company, considering the UK goverment is not doing anything substaintial. So yeah it will be tough times for them.
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