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Name: Nikunj Patel Student id: 0661SWSW1109 M.B.A II (Finance) Module: Research Methodology Tutor: Vijay Shenai
PROPOSED RESEARCH TITLE:
The Effect of Credit Crunch On Automobile Industry In U.K
Account decision making technique, financial management, business strategy global environment, Investment management capital markets.
The area of my research is credit crunch effect on UK automobile industry. Credit crunch start in 2007 and its effect liquidity shortfall in the UK.its effect in financial management, housing sector, economic growth and banking sector. Mostly in UK all automotive industry and financial sector struggling with this situation. So most of financial sector and banking system are affected according their connected with finance. But now automobile industry is going through its worse time due to effect credit crunch. In UK many automobile company like BMW, Jaguar, land rover, mercedez,and other foreign based auto mobile company like GM(General motors¶ )Chrysler,Toyota,asking for financial help from
government. In short danger alarm bells ringing for the automobile industry. In 2008 car estimated sales at 128, 352, in comparison of sharp fallen of 23% on October 2007.tearhis critical so difficult and its getting a role to play worst year-on-year monthly drop since august 2007. (BBC, 2008) I have divided my research proposal in six segments. In the first segment the title with subject and those modules in our student portal are being mentioned. And in the second segments shows what is the significance of particular area of research and how it bearing to my whole MBA course. In third segments identified area of research aim and specific objectives. Literature review study is described in fourth segments. When I have to collect all data gathering process than apply for identification of research method is mentioned in fifth segments. And in final segments it¶s prove the clear plan of survey.
The significance of the credit crunch effect on automobile industry and its importance to your whole programme area.
In master foundation programme one of the modules like ACCONTING DECISION MAKING TECHNIQUES studied and causes of credit crunch in financial and banking division. And also we studied in MBA SEMWSTER 1 the effect and causes of credit crunch in housing sector and economic growth in studied our one financial management. And in MBA SEMESTER 2 the modules BUSINESS STRATEGY IN GLOBAL ENVIRONMENT and CORPORATE FINANCE, INVESTMENT MANAGMENT AND CAPITAL MARKET those subject can help me to understand and easily get to better idea to complete my dissertation. And other modules MARKETING STRATEGY can assist to me business
strategy and chances in this strategy and how changes affect the performance of the industry. The effect of credit crunch on automobile industry gives the information about present situation of automobile industry. This topic involves the financial crisis of credit crunch like expenses, fixed and research expenditure, and capital bound in prepared vehicles. What the restriction and strict regulation of the UK government of the banking and financial institutions has decreased the capacity of borrowing and buying capacity of public. The automotive industry was damaged by a considerable increased in price of the spare parts. So how can financial disaster effect the decision of buyers to buy new car. In automobile industry big three company like General motors, Ford, Chrysler they making production planning and strategy to face survive in this situation. In the UK one of the car company India based TATA take over the two car manufacturer in UK like Jaguar and Land rover. TATA take the $1.5 billion loan from the government to cope with the credit crisis. The main drive of this topic is to get better idea of financial situation and financial strategic planning of automobile industry passing through the economic recession time. By data gathering by all fundamentals of information this research will reproduce how and how much credit crunch responsible for critical situation of automobile industry .many time automobile industry struggling with less liable seems bad leadership, price changes in fuel and oil, weak policy and development for position is in front of by industry. Some economical, social and technological factors affecting to automobile industry but still government involvement in this matter. And also its effected employment, related industries, effect on treasury of country.
This all research depended on financial crisis and how to evaluate planning and strategy of financial crisis. And also this research beneficiary for automobile suppliers and manufacturer and dealer. In the terms of financial crisis word it¶s very critically identified. Financial atmosphere like banks lending policies and buyers purchasing authority to compose the future decisions. This data also beneficiary for outside researcher and future economict, business analyses and with educational area finance, corporate finance, marketing strategy and those who MBA student work with multinational automobile company can use these dates to analyse the different automobile company.
RESEARCH AIMS AND OBJECTIVES:
In my research I am going to look at the matter for credit crunch effect on automobile industry in UK, and the effect of financial crisis in the UK and also other faced by the UK automobile industry as an dependable, relevant answers of particular my aims and objectives are: 1. What is the effect of credit crunch on automotive industry in UK region? 2. To identify the source of the financial crisis in UK and relates to past crashes in global environment. 3. What are government notice back side helping to the automotive sector? 4. What development and plan of automobile sector to oppose the insolvency and reform their success?
In order to my inquiry and more concentration on my research into the grow credit crunch in the automotive industry my goal to answer the following research questions: 1. How does credit crunch in automobile industry relate to the present financial crisis in the UK? 2. What are the cause crises for auto industry in the UK? 3. Is the credit crunch effect on automobile industry in the UK as a global financial crisis or is it a challenge faced by bankruptcy and reform their profitability?
LITERATURE REVIEW: CREDIT CRUNCH
Now latest issue credit crunch is the very crucial and hard word most flaming issues for all industry like financial, economical, social and technological. The credit crunch was start in august 2007 in USA because of negligent lending and mortgage high rate because of connected with finance sector and its started spreading in other businesses and industries in all over the world. Many author and researcher find out the meaning of credit crunch. Like in 2008, Wallace, Avis, and Smith say exactly the credit crunch situation when borrowing money comes that at the higher interest and borrower has to pay higher cost. The credit crunch started in 2007 in US subprime mortgage industry. According to Bernanke and Lown (1991) define the credit crunch as a refuse in the supply of credit that is strangely outsized for a given period of the business round. Credit normally fallen during a
recession, but an unusually large contraction could be seen as the credit crunch.
Credit crunch effect on automobile industry UK:
Time being passing automobile industry passing through the recession and its hit by many financial institutions. The figure shows that there is decreased safe of cars in UK.According to BBC news And TOP GEAR shows in UK they predict 40% fell in the month of March 2009 and that sales wasn¶t last 25 years. Now many automobile companies in UK has announced huge fallen in sale like 60% in BMW and 48% in GM(General Motors),Ford car sale fallen with 38%.and many researcher predict more worse in 2010.In this recession tome in automotive industry which step companies will take against the credit crunch. In the UK some borrower like bank of England, Lyods TSB, and citigroup has changes in their credit score requirements for the auto loans, credit cards, overdrafs, and personal loans. All this proving benefits so all institution has increased their fees and rate of interest. The Santander, Nationwide and HSBC bank make new strictly policies against the Home and Auto loan. The researcher and Economist in the UK are more bothered about other public car loan and insurance that can be posh by credit crunch market. During the credit crunch passing through automotive industry that time auto manufacturer like GM, Ford, Chrysler, BMW, and Mercedes Benz. And many auto manufacturer in UK asking to government to help to carry on in this credit crunch time. And also UK government is giving to little bit help to car manufacturer in UK at some level just seems banking sectors. If UK government not awake up than problem with unemployment in country and also import and export decreased
between world and UK automotive industry. If government would not assist to industry than government would loss UK £110 billion revenue and UK £146.2 billion tax next couple of year.
For the point of this research, my whole research topic depends on secondary data. Secondary data all ready collected from online source, automotive articles, and automobile suppliers. To analysing the effect of credit crunch on automobile industry in UK based market it is necessary to identified academic research work that has been finished before on connected topic. I am going to uses in my research three type of secondary data: survry, articles and multiple sources. My first research the literature will identified on credit crunch and its effects and effects of credit crunch on automobile industry in UK.The background of study related present condition of this automotive country and buyers¶ capacity of borrowing and costs will also a matter of disquiet. I will use data such as previous sales record of GM,FORD and CRYYSLER and banking sector which is also involvement in credit crunch.Iterview will also be used in data collection method; this will help to easily get reliable and well founded that is relevant to my research aims and objectives. All these research to check out the main reason discussed in earlier research are true or wrong. So all secondary data collected by internal and external source and it will analysis by keeping the all that type of questions in mind that being examine in aim and objectives of research.
In the primary data Interview can be prearranged, semi-arranged or unarranged. For the primary research of automobile industry of UK.it is not adjustable with to get interview with any car manufacturer, agencies or managerial staff. Interview cant arrange to manager with face to face and on call to mobile or visit to car showroom. That type of information and financial statement can¶t get properly. So secondary data I will use maximum level to finished my dissertation.
On my point of view multiple source and articles can used my secondary data these data will contain both from quantitative and qualitative information. The quantitative data such as sales, expenses.bankruptcy and all financial statement of car manufacturer its can be help in analysis of different type of varience.the quantities will include the numeric data like interest rate, sales figure of the BMW ,GM,CRYSLER,market share of the car manufacturer, economic growth, and automotive price rises and variation in this figures. Employment figures of industry will be used and to make this numeric information more get idea and under stable the calculation methods like mean, medien, mode and standard deviation will be used. In UK credit crunch affected in automobile industry during recession, government policies toward industry and much more information will include. And also all this data I will use of one of statistical method like regression and correlation. This all data collected from online source, articles, journals, new paper, BBC news,BBC news Top Gear. Some data collected form car manufacturer annual report, survey done by other institutes on automobile industry and banks lending institutions policies towards car
loans. Data collected from authorised sources to maintain reliability and validity. The most of articles collected from online source and college library and science Directs. This all secondary data explain to credit crunch effect on automobile industry in UK.in automotive industry which company well performance in market and which development method and plan used in automotive industry. How can UK government awake up to credit crunch affected on credit crunch? Different type of car manufacturer follows different type of planning and strategy so this connected the literature will be analy sed for the reason of evaluation and thorough kind of topic.
Dependability and Legality:
Dependability and Legality worried about consistencies of quantity. The data collected from secondary source which are more dependable and genuine sources. All data collected and compare with each other so quiet few get more reliable and validity of data. While a care will be experimental during processing of data. But, the errors and omissions during the handing out of data can guide towards hesitation about consistency.
There are some boundaries of this research. The maximum secondary data will be used because it is quite difficult to contact managerial staff of the car manufacturer company for handling data or face to face interview with managers or on telephone. Limitation of this research main problem is time limit and financial constraints it will not allowed to
visit any automotive car manufacturer company in UK so my whole research depend on secondary data and information.
Ethics of the research connected to issue about how we explain and identified our research topic, the data gathering and processing method and how to find out survey about this topic in a proper and liable technique. When I will data collected mostly I use d quantitative data used in conducting this research. I will use the quantitative data with techniques used mean, mode, median, standard deviation. And other statistical method used likes regression and correlation.
This all research will depend on secondary data. So research highlights the financial condition in automotive market and how to resolve with financial crisis and bankruptcy in automotive industry in UK.and expand between these factor and fallen the automotive market. A suggestion that will assist check or estimate a fallen will as well set forward.
Wallace j. Avis,M .A .Smith (2009)´the credit crunch: A domino effect ³Business perspective University of Memphis articles in 2009 volume 20,page 60-64 reteived April 1st 2009 from
http://www.allbusiness.com/banking-finance-lending-credit-servocessubprime/10204236-1.html TIMELINE: credit crunch to fallen from http://news.bbc.co.uk/1/hi/business/7521250.stm http://findarticles.com/p/articles/mi qn4183/is 20081121 /ai_ n31035452 British Automobile industry badly hit by credit crunch 2008 www.automobile-news.co.uk/industry MARK EASTONs UK: Has the credit crunch left us poorer. September 2010 14th 0ctomber April 7th 2009
www.bbc.co.uk/blogs/...2010/ Qualitative and quantitative research retrieved 2009 www.medicine.ox.ac.uk/bandolier/booth/glossary/qualres.html Credit crunch: crisis Management hits by Auto Industry www.strategyanalytics.com www.guardian.co.uk/business//2009/aug/19/creditcrunch.marketturmoilt he 8th march
³Impact of the credit crunch on UK Borrowers Debt Mountain into 2008´Articles 2007 by Walayat N. http://www.marketoracle.co.uk/Articles2734..html Credit crunch Explained video Retrieved November 27 th 2008 from www.bbc.co.uk/1/hi/business/7544275.stm Credit Crunch .explanation retrieved November 2009 form http://en.wikipedia.org/wiki/creditcrunch Msn.com, car prices of GM, Ford, Chrysler, and Toyota retrieved Toyota Company research All Models and prices-MSN autos http://news.bbc.co.uk/1/hi/business/6346325.stm Credit crunch: small cars struggling with sales move www.guardian.co.uk/business/2008/automotive.creditcrunch BMW land where power meets control- UK BMW-CRIDIT CRUNCH www.bmwland.co.uk Crunch may drive Ford to sell Volvo to BMW-Times Online articles 5014601 Business.timesonline.co.uk Credit crunch to Downturn BBCNEWS in business www.bbc.co.uk/1/hi/7521250.stm ³The Credit Crunch´, Brooking paper of Economic Activity Written by Bernanke, B.S, &Lown Issue.2 page No.205-248. timeline
³Unravelling the Credit Crunch´ Written by David S.J.Murphy- Retrieved June 25th 2009 from books.google.com ³DRIVEN´ Written by David Kiley, Inside BMW, the Most Admired car company in the world retrieved august 17 th 2004.books.google.com BMW Group: Investor Relations: Annual Report 2004 www.bmwgroup.com Financial statements of BMW AG Financial year 2009 www. bmw group.com/...bmwgroup.../BMW_AG_Jahresabschluss_engl. pdf Jaguar Land Rover must now turn itself into a viable business Hit by RECESSION www.telegraph.co.uk/.../ Recession-Jaguar-Land-Rovermust-now-turn-itself-into-a-viable-business.html Jaguar Land Rover boss: Recession could hit us for 3 years: Liverpool Local news www.liverpoolecho.co.uk/.../ jaguar-land-rover-boss-recession-could-hitus-for-3-years-100252-22623167 GM sales continually Downturn and Hit by credit crunch: According to BBC News www.bbc.co.uk/1/hi/7521250.stm Credit Crunch hits cars, Ford, Toyota and GM Motors Retrieved by October 10, 2008 www.100mortgages.org/.../ credit-crunch-hits-cars-ford-toyota-and-gmmotors
Toyota Plan to Cut Global Output May hit UK plant-Times Online business.timesonline.co.uk/tol/business/.../article6810389.ece Vauxhall Hit BY the Credit Crunch: GM Headline www.cararticles.co.uk/uk-vauxhall-hit-by-the-credit-crunch.html
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