Economic Meltdown

Thanks to global recession the global demand for various commodities has gone down to an extent that one might have thought off. Auto is one industry which is bleeding like anything in this whole turmoil.
Many Companies have cut down their production or going for a complete plant halt, In India Tata Motors, Ashok Leyland and other players who are working on JIT basis whereas, In International market companies like Ford and BMW have started making a negative growth is sales due to lack of demand of their products produced.

Keeping this in mind companies are selling their products on a throw away prices a recent example can be. Honda Motors offering a whooping discount of 40% on their Hybrid Car (Honda Civic Hybrid). Which they were able to sell only 30 to 35 units prior to discount was offered.

Company says “The car is completely imported, but its sales suffered unsustainably because of the prohibitive price resulting from a 105 per cent import duty”. And at the same time they have announced that the discount offered was temporary in nature.

In India some internal sources say that automobile companies specially SME’s who work for big players have started sending their work force to a forced holiday to curtail their daily running cost and others are shutting their plants or cutting their production by 50%.

Now that’s huge, My question raises till the early 2007 when we have analyst and economist’s saying that we see a demand growth in the system and after few weeks we see things turn out be very odd in nature. Why is this happening did we over estimated the situation?

Loans were given on a call “No proof required”. People like me who hardly make 15 K (fixed + variable pay) were talking auto loans like bread from a general store.

Now the time when corporations are collapsing like a building made with card stacks. One has to face the risk of losing a job and at the same time he has to take care of his debt (Home Loan, Auto Loan, and Personal Loan).

I sometimes wonder how a home loan market which was in USA collapsed and made the rest of the world’s economy to melt (Slowdown). European Union where every company used to form their SPV to fund their expansion needs have officially announced about their recession.

The only conclusion that I can derive by seeing the whole scenario is that the capitalist were trying to sell their products by ignoring the basic principles of doing a business and specially the lending activity, at the same time the money that you pay as taxes would first used to take out the big corporations out rather than a common man. So one has to be smart and needs to spend and invest wisely

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