Global auto majors vie to set up plants in Chennai

C Shivakumar

Chennai:

Oragadam is slowly emerging out to be the global auto hub as many international auto majors are opening up plants to reach out to global as well as emerging markets.

Firms like Ford, Daimler, Nissan, Yamaha, Royal Enfield, Renault, Hyundai, BMW and several others have set up facilities in Chennai and Orgadam to tap the emerging Asian markets besides even markets in Europe and America.

Interestingly, a study has predicted that the Chennai auto component  sector is likely to grow by 20 percent annually with 30 per cent growth in exports over the next five years to become a global hub of auto component suppliers.

It is not only the four wheeler industry but also the two-wheeler makers who are vying to have a presence in Orgadam. Royal Enfield which has set up a plant in Tiruvotiyur has opened up a new plant in Orgadam besides Yamaha which initially had a presence in northen India has set up a Rs 1,500 crore factory built on 440,000 square meteres of land in an industrial park in Vallam Vadagal.

One of the reasons attributed to the the shift of global auto majors towards Chennai is blamed on recession and the declining volume of sales in Europe and other developed nations. These auto majors are now shifting towards towards emerging market and increasingly towards China and India. Firms like Nissan has set an ambitious target of gaining 10 pc share of India’s automobile market.

Not only that Chennai is also becoming a global auto hub as models produced in Chennai are being exported globally. This has also boosted the revenue of ports. Ports like Ennore is planning to export three lakh units of cars in the next two years. Firms like Toyota, Renault, Nissan and Ford are likely to export three lakh units from the Ennore port in the next 18 to 24 months, which is the full capacity of the port.

Interestingly, the state government under the AIADMK regime has signed Memoranda of Understanding (MoU) with five auto majors to bring in new investments to the tune of at least Rs.5,700 crore which would provide employment opportunities for 9,530 persons. 

Officials in state government say these efforts were in tune with the objectives of the Vision 2023 to make Tamil Nadu one of the first three destinations in Asia for attracting direct investments.

The auto majors which signed MoU include Daimler India Commercial Vehicles Private Limited (Rs.4,000 crore), India Yamaha Motor Limited (Rs.1,500 crore), Ashok Leyland - Nissan Motor Company Limited (Rs.4,150 crore), Eicher Motors Limited (Rs.350 crore) and Philips Carbon Black Limited (Rs.350 crore). 

The autocomponent industry of Chennai is initially linked to setting up of industries like Ashok Leyland, TVS group, Rane group and other industries. This slowly grew with busines friendly policies of the state government and emergence of three new ports besides strong engineering and automobile sectors