[prateekswarup]

I am a little confused and I'm hoping someone here can enlighten me.
The bailout for the big three is not materializing.

What is going to be the future of the vehicles that belong to the big three in India?

I mean, will Ford and GM shut down in India concerning the situation of their parent company?

Or are the Indian offices of GM and Ford safe from the bankruptcy that is eventually going to hit their parent companies?

Also, FIAT is shutting down its 6 factories in Italy for a month due to lack of sales in the European market. Is FIAT also on the verge of shutting down?

Link for FIAT news:
UPDATE 1-Fiat extends temporary plant closure programme | Industries | Consumer Goods & Retail | Reuters

@Mods: If this it at the wrong section please feel free to remove/move this thread. Thanks

[finneyp]

Fiat has temperorily halted production in some of its factories in Italy coz of low sales in Europe, that in no way means Fiat is shutting down!

[amit]

The slowdown has hit all car makers globally so it's not just about the three makers listed down here.

- Suzuki and Suburu have pulled out of WRC. Honda pulled out off F1.

- Honda has slashed it's profit forecast by 67% and has announced 10% paycuts for it's managerial and directorial staff. It has also delayed declaring dividends.

- Honda North America is slashing production by 1,19,000 units.

- Honda has put on hold it's global expansion plans including the Indian one.

- Honda Car India is stopping production for the rest of December due to piling up inventories.

- Nissan Japan is cutting production by 78,000 units and laying off about 450 workers. This is going to lead to the company stopping production at it's Japanese factories temporarily.

- Toyota is expected to come out with it's own set of grim news.

- Suzuki is also cutting production, laying of temporary workers and planning to temporarily shut it's factories due to piling up inventories.

Point is that the grim news is not just restricted to a few car makers. As the Fiat CEO has said, this phase means cartain carmakers will have to get together to tide over the crisis or risk permanant closure of their business.

I think Chrysler will be the first car-maker to fall to this crisis.

Have any of you read Toyota's announcement that if the Big-3 fall, it will lead to chaos at Toyota plants too as they share a lot of vendors with the Big-3 and a lot of vendors are going to go bankcrupt if the big 3 fall.

[snaronikar]

IMO, the indian arm may slow down operations but will definately they will not shut down the plants. India is a growing economy and we are less affected compared to other developed countries in the world. Shutting down operations be it in India or in BRIC countries will mean more disaster to these companies.

[phamilyman]

Amit has nailed it. thread title needs to be changed

[Sowmya]

@Amit You have forget to mention our Home Company.
- Tata temporarily shut down their factory for few days. Jamshedpur/Pune plant is shut down weekly 2/3 days. But the irony is that TATA is taking part in F1.

FIAT will not shut down until TATA and Maruthi are there. Where will TATA and Maruthi will go for engine ?

[aseem]

The fact of the matter is that these companies wont go bankrupt as the 700 billion dollar financial bailout funds will now be used to rescue GM in the short term. Fords outlooks is relatively good and it doesnt need money to survive in 09.
If however 1% these companies do file for chapter 11, in that case you can kiss goodbye to GM india.

[JVH]

Originally Posted by amit

The slowdown has hit all car makers globally so it's not just about the three makers listed down here.

- Suzuki and Suburu have pulled out of WRC. Honda pulled out off F1.

- Honda has slashed it's profit forecast by 67% and has announced 10% paycuts for it's managerial and directorial staff. It has also delayed declaring dividends.

- Honda North America is slashing production by 1,19,000 units.

- Honda has put on hold it's global expansion plans including the Indian one.

- Honda Car India is stopping production for the rest of December due to piling up inventories.

- Nissan Japan is cutting production by 78,000 units and laying off about 450 workers. This is going to lead to the company stopping production at it's Japanese factories temporarily.

- Toyota is expected to come out with it's own set of grim news.

- Suzuki is also cutting production, laying of temporary workers and planning to temporarily shut it's factories due to piling up inventories.

Point is that the grim news is not just restricted to a few car makers. As the Fiat CEO has said, this phase means cartain carmakers will have to get together to tide over the crisis or risk permanant closure of their business.

I think Chrysler will be the first car-maker to fall to this crisis.

Have any of you read Toyota's announcement that if the Big-3 fall, it will lead to chaos at Toyota plants too as they share a lot of vendors with the Big-3 and a lot of vendors are going to go bankcrupt if the big 3 fall.

Spot on! This applies not only to the Auto industry but also other industries as well where global players have offices/plants around the world.

On The Toyota vendor thing, there is an interesting discussion going on in linkedin. Many are even thinking about the possibility of how Indians (read Tata) make the best out of the situation

[prateekswarup]

Originally Posted by amit

The slowdown has hit all car makers globally so it's not just about the three makers listed down here.

- Suzuki and Suburu have pulled out of WRC. Honda pulled out off F1.

- Honda has slashed it's profit forecast by 67% and has announced 10% paycuts for it's managerial and directorial staff. It has also delayed declaring dividends.

- Honda North America is slashing production by 1,19,000 units.

- Honda has put on hold it's global expansion plans including the Indian one.

- Honda Car India is stopping production for the rest of December due to piling up inventories.

- Nissan Japan is cutting production by 78,000 units and laying off about 450 workers. This is going to lead to the company stopping production at it's Japanese factories temporarily.

- Toyota is expected to come out with it's own set of grim news.

- Suzuki is also cutting production, laying of temporary workers and planning to temporarily shut it's factories due to piling up inventories.

Point is that the grim news is not just restricted to a few car makers. As the Fiat CEO has said, this phase means cartain carmakers will have to get together to tide over the crisis or risk permanant closure of their business.

I think Chrysler will be the first car-maker to fall to this crisis.

Have any of you read Toyota's announcement that if the Big-3 fall, it will lead to chaos at Toyota plants too as they share a lot of vendors with the Big-3 and a lot of vendors are going to go bankcrupt if the big 3 fall.

I know about the production woes of Honda, the WRC scenario and even the Toyota announcement. Although the above information clarifies that the automakers are facing a severe crisis and are doing everything plausible to rectify the situation, I am under the impression that the big -3 will be the most hit.

If this is the case, where does it leave the people who are going to buy Ford/GM vehicles in India? Do we assume that a lot of models may be shelved to streamline the costs or will the Indian customer enjoy the same reliability in terms of parts and after-sales of the cars produced by the Big 3 in India?

Basically would it be alright to buy a Ford/Gm vehicle right now?

What happens to their Indian operations if the parent company files for bankruptcy?

[crn12]

Originally Posted by JVH

Spot on! This applies not only to the Auto industry but also other industries as well where global players have offices/plants around the world.

On The Toyota vendor thing, there is an interesting discussion going on in linkedin. Many are even thinking about the possibility of how Indians (read Tata) make the best out of the situation

Can you show me the link on linkedin? Thanks

Nitin

[varun83]

None of the big three would face a situation of a complete shut down around the world.
The only possibility is cutting down on their size in loss making / economically unviable markets.
After all these companies have all the technology they need in the world to create products of good quality that can compete in any international or domestic market.
Maximum hit that these companies will take would probably be a reduction of 40% in terms of overall size, which would trim their revenues and expenses equally.

The only reason for any company to completely withdraw from any market would be is if their products are not competitive enough in the market. The big-3 will surely remain in the global markets but might not continue to hold the top spots.

[JVH]

Originally Posted by crn12

Can you show me the link on linkedin? Thanks

Nitin

Nitin,

You've got to be a member of linkedin and a group member of India Leadership network to access this. If you do have the relevant memberships, here is the link

LinkedIn: Sign In

@prateekswarup - we can discuss and speculate on a lot of things on your questions but don't you think only time is the answer to how would this turn out to be?

If I were a prospective car buyer, I would not consider them atleast for the next 6 months

[ACM]

I guess its mostly all equals. It is as safe or unsafe to buy any perticular brand currently among the names mentioned.

My perception:

Tata in India is also leveraged poorly after the Jal Land Rover Deal, and Suzuki (Maruti) is obviously a smaller player than Honda and Toyota who too are hit.

The government in USA if as likely to do something for GM / Ford in the USA as they are for say the Indian Govt. Tata or to some extent Maruti in India. (If required that is)

Amercian cos; Ford seems safer than GM which seems safer than Crystler
Jap cos: JToyota seems safer than Honda which seems safer than Suzuki which seems safer than Mitshubishi.
Korean cos: Hyundai seems much better off than Kia.
German cos: Were never into big numbers except the VW.

VW Group and Fiat both seem to be better bets than the American set but worse off than the Toyota from the Japs.

Each nation will do its bit for a it's own companies and these may each differ investment into foreign plants but that would/ should not mean closure of sales and service networks.

One major company going down even for a short while would affect sentiment globally, but then there is be more business that the rest can share amongst themselves.

I guess it is the same in all industries.

As mentioned earlier that's my perception, but have been know to be wrong.

[aaggoswami]

The fact is that Suzuki, Subaru ( now part of Toyota ), Honda are having good amount of cash on hand. Compare this with GM, Fiat, Chrysler. They are not having sufficient cash. That's why Fiat is planning a merger. Mostly Fiat and PSA are going to merge. So there are chances of Fiat managing to stay alive, so in India also, they will survive. But the same cannot be said about GM. If GM files for bankruptcy, then the Indian operations are bound to get hit. In one way or other.

Ford is in good condition, but if the GM and Chrysler fall down, the entire supplier chain is going to get hit and in turn Toyota, Honda will also get hit. Suzuki is basically dependent on its home operations, India and Europe, so no problem here.

GM is what I see as the one to fall after Chrysler and so GM India's future is cannot be said as very bright in India. Fiat will survive.

[rudrah]

Yesterdays reports at CNN:

1. Chrysler going to shut down all operations all over US for a month
2. General Motors announced it was idling 30% of its North American manufacturing capacity during the first quarter of 2009
3. Ford confirmed that the automaker is adding a week to its normal two-week seasonal shutdown at a number of its plants.