London school of commerce

Name: Nikunj Patel

Student id: 0661SWSW1109 M.B.A II (Finance)

Module: Research Methodology

Tutor: Vijay Shenai

RESEARCH PROPOSAL

PROPOSED RESEARCH TITLE:

The Effect of Credit Crunch On

Automobile Industry In

U.K

Related Modules

Account decision making technique, financial management, business strategy global environment, Investment management capital markets.

Abstract

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?

RESEARCH QUESTIONS:

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.

RESEARCH METHOD:

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.

Primary survey:

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.

Secondary data:

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 analysed 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.

LIMITATION:

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.

ETHICAL CONSIDERATION:

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 used 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.

CONCLUSION:

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.

REFERENCES:

Wallace j. Avis,M .A .Smith (2009)”the credit crunch: A domino effect

“Business 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-servoces-

subprime/10204236-1.html

TIMELINE: credit crunch to fallen April 7th 2009

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 0ctomber

2008

www.automobile-news.co.uk/industry

MARK EASTONs UK: Has the credit crunch left us poorer. 14th

September 2010

www.bbc.co.uk/blogs/...2010/

Qualitative and quantitative research retrieved 8 th march

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.marketturmoilthe

“Impact 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 27th 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 timeline

www.bbc.co.uk/1/hi/7521250.stm

“The Credit Crunch”, Brooking paper of Economic Activity Written by

Bernanke, B.S, &Lown Issue.2 page No.205-248.

“Unravelling the Credit Crunch” Written by David S.J.Murphy- Retrieved

June 25th 2009 from books.google.com

“DRIVEN” Written by David Kiley, Inside BMW, the Most Admired car

company in the world retrieved august 17th 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/... bmw group.../

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-Rover-

must-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-hit-

us-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 - hit s-cars-ford-toyota-and- gm -

motors

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