Chennai- The Promised Land for Indian Auto

With more than $3.1 billion worth of investment in the year 2010-11 by the who’s who of the global automotive industry, Chennai is well on its way to becoming what  many analysts are calling, rather unfairly I feel, the emerging Detroit of South Asia( after all, Detroit in 2010 is not a very happy place to be in). BMW, Ford, Nissan, Hyundai, Ashok Leyland- you name the car and chances are you will find its latest model coming out of a Chennai showroom. So what is it that this southern port city has that its rivals do not? Before you say it’s Rajnikant, let me put those grey cells at ease and point to certain other, entirely non-Rajni factors that have played a big role in transforming this once conservative city into a global auto hub. The biggest reason for Chennai’s success has to be the state government’s unwavering support to the industrialization of Tamil Nadu as a whole, and the capital in particular. From monetary incentives for all investments greater than Rs.4000 cr, to the setting up of a single window clearance mechanism and finally, to the facilitation of land acquisition for setting up of manufacturing plants, successive state govts, irrespective of party affiliation have pulled out all the stops for creating a conducive environment for foreign investment. Furthermore, another critical factor has been the fact that Chennai is blessed with a sea port, making it the ideal base for companies like Ford and Hyundai to export cars across the world. In fact, Hyundai India has made Chennai its manufacturing and export hub for small cars, with the i10 and i20 models being manufactured only in Chennai and thereon exported to the rest of the world( Pune, Chennai’s closest  rival suffers greatly on account of having to rely on the Mumbai port, nearly 200 km away). And though some of us may feel the state has gone overboard with its zeal for technical education (apparently thousands of engineering seats go vacant every year), the presence of an engineering college in practically every second street corner has ensured a steady supply of  a well trained low-wage labor force that can fulfill all  possible manpower requirements of the numerous  car makers that have set up shop in the city. Chennai also has almost 35 percent of India’s share of auto ancillary units, thus complementing its already existing status as India’s leading car-making city. Finally,lest I forget,the Central govt has also played its part by implementing the National Automotive Testing and R&D Infrastructure Project in Oragdam, Chennai, at a cost of around Rs 450 crore. The project aims to facilitate the introduction of world-class automotive safety, emission and performance standards in the country and ensure seamless integration of our automotive industry with the global industry, giving us a better chance to cash in on the $6-trillion global automotive industry.   The Chennai auto industry’s dream run is likely to continue for some time to come. At 26.2%, India was the second fastest growing automotive market in the world last year, and given the extremely low penetration levels in the Indian market, we are likely to see such growth rates for many more years ahead of us. All of which makes me wonder just how Delhiites like myself are going to get to work on time given the already suffocating jams one has to grind one’s way through every single morning. I will be needing new excuses, and I will need them fast. Perhaps Rajni coud be of help after all…

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