Tata Motors: Jaguar Land RoverUK Government has finally agreed to given 2.3 billion pounds in loan to help the ailing auto makers in the country survive their financial crunch. Among auto makers to benefit from this move are JAGUAR LAND ROVER (Tata Motors enterprise) and Vauxhall.

Luxury cars market has been hit hard by slowing demand. Already when Tata Motors purchased Jaguar and Land Rover from Ford in early 2008, both were loss making arms of Ford. That was in fact the primary reason why Ford had put up JLR on sale - so that JLR would stop bleeding its revenue which would then allow Ford to concentrate on its operations in the US. Land Rover was among the better performing brand than Jaguar. Nevertheless, it was clear even to Ratan Tata, that any attempt to convert JLR into profit making brands would involve substantial investment. The credit crunch of 2008 and now the ever slowing demand for luxury cars has made this almost impossible and Tata Motors is struggling for cash.

This is one reason why UK governments loan to Tata Motors will come as a very welcome move for Tata Motors. Remember that although fall in crude oil prices does help the auto industry in general, i think it is not a primary concern as far as the luxury car markets is concerned.

Jan 28, 2009

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