Product details

Ramakrishna Motors Ltd was one of India's pioneers in vehicle manufacturing. It engaged in the manufacture of a wide range of products from general purpose engines to specialised multi-purpose vehicles. The company had established a plant at Agra with an investment of Rs 150 crores. The project was an ambitious venture to convert Agra into the Detroit of India. The project, however, failed to take off, due to the inability of the company to secure a licence for the manufacture of the proposed passenger car. The Agra plant, therefore, was converted into a feeder plant supplying parts for the company's main plant at Bangalore. The liberalisation policy meant the company faced stiff competition to its existing product line, it suffered losses and the Agra plant was severely under-utilised. The case provides an in-depth view of the company strategy, its financial aspects and implications. It also provides scope for analysis of the future plans of the plant. The objectives of the case are: (1) to throw light on the company's strategies and investment decisions; (2) to evaluate the financial repercussions of the company's strategies; and (3) to help the students to evaluate the cost benefit equation of future proposals. The issues in the case are the investment decisions, the coping strategies and the future financial implications of proposed plans. The conceptual framework behind the issues needs to be discussed with the students, with emphasis on the investment decision. The need to study the implications and financial considerations involved in investment decisions. The case needs to be analysed at both individual and group level and then presented before the entire class for discussion and input.