Tata Motors, financial trouble?

jp1 · 5th February 2009, 10:21

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

aaggoswami · 5th February 2009, 10:30

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.

BaCkSeAtDrIVeR · 5th February 2009, 11:09

Looks like bad times for Tatas - always getting publicity for the wrong reasons. Hope they get out of the bad publicity mess asap.

loving_alaap · 5th February 2009, 11:27

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

hrishig · 5th February 2009, 11:30

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.

VooDoo · 5th February 2009, 11:36

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!

theMAG · 5th February 2009, 12:33

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.

VooDoo · 5th February 2009, 12:47

I am seeing some Vista, Grande and very few Indigo XL on Kolkata roads. Probably because I am conciously trying to find one!!

diesel_head · 5th February 2009, 14:22

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.

abk · 5th February 2009, 14:23

Quote:

Originally Posted by VooDoo

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.

esteem_lover · 5th February 2009, 14:31

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.

joslicx · 5th February 2009, 14:51

No intentions to open a can of worms here but I wonder what mamta bi would have to say about this!

DieselFan · 5th February 2009, 15:03

Tata Motors stocks are tanking in the market from 180 in dec it is below 135 now.

suman · 5th February 2009, 15:15

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?

Samir Taheer · 5th February 2009, 15:17

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.

5th February 2009, 10:21	#1
jp1 BHPian Join Date: Jun 2006 Location: Bangalore Posts: 286 Thanked: 47 Times	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
	() Thanks

5th February 2009, 10:30	#2
aaggoswami Senior - BHPian Join Date: May 2007 Location: Vadodara Posts: 4,987 Thanked: 2,968 Times	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.
	() Thanks

5th February 2009, 11:09	#3
BaCkSeAtDrIVeR Senior - BHPian Join Date: Jun 2007 Location: Kochi Posts: 2,541 Thanked: 755 Times	Looks like bad times for Tatas - always getting publicity for the wrong reasons. Hope they get out of the bad publicity mess asap.
	() Thanks

5th February 2009, 11:27	#4
loving_alaap BHPian Join Date: Sep 2007 Location: Ahmedabad Posts: 808 Thanked: 9 Times	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
	() Thanks

5th February 2009, 11:30	#5
hrishig BHPian Join Date: Apr 2007 Location: Pune Posts: 466 Thanked: 182 Times	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.
	() Thanks

5th February 2009, 11:36	#6
VooDoo BHPian Join Date: Sep 2005 Location: CA, US Posts: 59 Thanked: 0 Times	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!
	() Thanks

5th February 2009, 12:33	#7
theMAG Distinguished - BHPian Join Date: May 2006 Location: Avon, CT Posts: 7,219 Thanked: 1,816 Times View My Garage	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.
	() Thanks

5th February 2009, 12:47	#8
VooDoo BHPian Join Date: Sep 2005 Location: CA, US Posts: 59 Thanked: 0 Times	I am seeing some Vista, Grande and very few Indigo XL on Kolkata roads. Probably because I am conciously trying to find one!!
	() Thanks

5th February 2009, 14:22	#9
diesel_head BHPian Join Date: Feb 2007 Location: Dubai Posts: 71 Thanked: 74 Times	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.
	() Thanks

5th February 2009, 14:31	#11
esteem_lover Senior - BHPian Join Date: Jul 2006 Location: Madras/Py Posts: 7,556 Thanked: 507 Times View My Garage	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.
	() Thanks

5th February 2009, 14:51	#12
joslicx Senior - BHPian Join Date: Dec 2006 Location: Bangalore Posts: 1,287 Thanked: 1,015 Times	No intentions to open a can of worms here but I wonder what mamta bi would have to say about this!
	() Thanks

5th February 2009, 15:03	#13
DieselFan Senior - BHPian Join Date: Mar 2007 Location: Bangalore Posts: 1,584 Thanked: 259 Times	Tata Motors stocks are tanking in the market from 180 in dec it is below 135 now.
	() Thanks

5th February 2009, 15:15	#14
suman Senior - BHPian Join Date: Sep 2005 Location: Kolkata Posts: 4,589 Thanked: 281 Times View My Garage	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?
	() Thanks

5th February 2009, 15:17	#15
Samir Taheer BHPian Join Date: Sep 2008 Location: London & Pune Posts: 459 Thanked: 278 Times	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.
	() Thanks