In order to prevent immediate cash flow crisis, Tata Motors Ltd has decided to inject tens of millions of pounds into Jaguar Land Rover which was bought by Tata earlier this year. The on-going economic slow down and the decline in the sales have badly hit the carmakers all around the world. According to media reports British Prime Minister Gordon Brown, Chancellor (finance minister) Alastair Darling and Business Secretary Peter Mandelson had agreed that assistance for Jaguar would be necessary to prevent its collapse.

 

According to a spokesman for Britain's Department for Business, Enterprise and Regulatory Reform, the government stands ready to help companies in the current difficult economic circumstances but does not have an open cheque book. The spokesperson also said that the government wanted to help the car industry through the economic downturn but the main responsibility lies with the carmakers' owners.

 

Over the past few weeks, the British government has been in contact with Tata over Rover. After holding talks with Land Rover, the British officials stated that the company is under strain. Trades unions have called on the government to step in to save an industry employing tens of thousands directly and indirectly through suppliers. The global economic slow down has forced the governments of several countries to step up to rescue the auto-market. Last week, the United States announced a $17.4 billion loan package to rescue its sick auto makers.