India Watch : S&P cuts Tata Motors’ credit rating

Paul McVeigh, Automotive News Europe, 25th March, 2009

Standard & Poor’s Ratings Services today lowered its corporate credit rating on India-based automaker Tata Motors Ltd. to B+ from BB-.

Standard & Poor’s said the action followed a deterioration in Tata Motors’ cash flows during the economic downturn, which, combined with significantly high debt levels, will affect the company’s credit protection measures.

Standard & Poor’s said the newly launched Nano has the potential to benefit to Tata Motors’ cash flows but not until main Nano production factory in Gujarat, India, starts full production in 2010.

The ratings agency said Tata Motor’s Jaguar and Land Rover brands have been severely affected globally by weak demand for cars. The brands “continue to register volume declines and that is expected to prevail for the rest of 2009,” the agency said.

Tata Motors bought Jaguar and Land Rover from Ford Motor for $2.3 billion in June 2008.

Standard & Poor’s said the newly launched Nano has the potential to benefit to Tata Motors’ cash flows but not until main Nano production factory in Gujarat, India, starts full production in 2010.

Reuters contributed

[Source: Automotive News Europe]

Clive Goldthorp

About the Author:

Clive claims that his interest in the BMC>MG story dates back to his childhood in the 1960s when the family’s garage premises were leased to a tenant with an Austin agency. However, back in the 1920s and 1930s, his grandmother was one of the country’s first female Garage Proprietors so cars probably run in his genes! Admits to affairs with Alfa Romeos, but has more recently owned an 06/06 MG TF 135 and then a 15/64 MG3 Style… Clive, who was AROnline’s News Editor for nearly four years, stood down from that role in order to devote more time to various Motor Racing projects but still contributes articles on as regular basis as his other commitments permit.

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