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Last updated: April 1, 2016 at 16:52 pm

Chennai – Fast becoming India’s Auto Manufacturing Hub!

What comes to your mind when you think of Chennai? Idli, Vada, Sambhar, Dosa, Lungis, women having flowers in their hair?  Also, over past decade, Chennai has grown to become one of the hottest educational cities in the country with more than 500 colleges of different shapes, sizes and courses. But there is another thing Chennai will soon be known for – Its Automobile and Manufacturing prowess!

Over the last couple of years Chennai has truly developed into a world class industrial and manufacturing hub with organizations across IT, Automotive, Telecom, Retail springing up everywhere. The Chennai – Bangalore corridor is in line to be the biggest industrial corridor in the next few years.

Hyundai-Cars

What’s cooking in the Chennai automotive sector?

Talking about the automotive sector, Chennai is fast moving in the direction of becoming India’s next Detroit. There has been an investment of more than US$ 3 billion in this sector which is slightly more than Gurgaon, another auto hub. This along with the fact that the current installed capacity of more than 1.3 million vehicles which is expected to go only way that is UP after the increase in capacity of different manufacturers, sounds like amazing news for industrial development in this region.

And what’s the best part? Ford, BMW, Renault, Nissan, Mitsubishi – HM are all planning to come up with new projects in the area in the coming year or two.

So what exactly is so special about Tamil Nadu’s automotive policy?

The biggest reason which has encouraged automotive players of all hues and sizes to invest in Tamil Nadu has been the friendly industrial policies formulated by the government. Since 2006, the state’s policy gives special incentives to organizations investing more than 4000 cr.

This has attracted investments worth more than Rs 22,000 cr which is five times of that in the previous 5 years. These incentives range from those like tax cuts, easy acquisition of land and also speedy implementation of the projects. Doesn’t this sound familiar to what the Himachal government has been doing for years?

These policies have also helped organizations develop strong technological and research centres in the city. Companies like Hyundai have made Chennai their hub for small cars. They manufacture their models like i10 and i20 only in Chennai and transport it to other parts of the nation as well as exported outside.

And above all, it’s not only auto manufacturers who are making a beeline for Chennai. Auto component manufacturers like Visteon, Delphi produce more than 25% of their components here.

The government’s recent move in setting up one of the biggest R & D centres for building up technological and R & D expertise will only add to Tamil Nadu’s image as an investment friendly state in the automotive sector.

Do you think Chennai has the potential to do what Detroit did?

8 Comments

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  • Sir, I am looking for dealers who can provide me automobile cutting, i.e window, door etc (sheet metal component. so if you know someone who deals in this please let me know. thanks Kapil Jain +9219849130 hamjain@yahoo.co.in

  • Salaam Chennai. By these newcomers, India will become first in position of making automobiles, before 2012. http://www.turbosaga.com

  • Thanks all for the other points as to why Chennai has become the auto hub..And yeah its Oragadam as Mr Achyuthan has rightly mentioned..:)

  • Aseemji, The article was well put. And I don’t think the question at the end is really necessary. Some other remarkable points i’ve found synonymous 1. Availability of Engineers: R&D requires engineers in large numbers and Chennai caters the need with extremely talented engineers. 2. Places of importance: I think you might want to google “ORAGADAM”, the so-called village, which is now the bustling hub for foreign based Automobile manufacturers like BMW, Nissan, etc. Because it’s away from the city, it doesn’t suffer from the problems of land acquisition, water and population. So, technically speaking, it’s Oragadam [not exactly Chennai], that’s gonna have the potential to become the “Detroit of Asia” [not Detroit of India]…

  • Couple of additional points, why Chennai is being prefered. i) Sea port. This play a major role is prefering Chennai. Car manufacturing is no longer confined for consumption within India a certain percentage is exported. For car export the mode of delivery is via Sea, so untimately Chennai have this unique advantage. iii) Less militancy in working class, which offers another advantage. In last one decade, working of industry was not disrupted by name of strike etc. when compared to other state, which happens every now and then.

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