Chennai is certainly back as India's auto-capital

Chennai: Chennai's Detroit-tag appeared more credible on Monday with Tamil Nadu chief minister Jayalalithaa signing five MoUs with auto majors for setting up production plants near the city.

The companies that will set shop near Chennai are Yamaha, Ashok Leyland-Nissan Motor Company, Daimler-India Commercial Vehicles, Eicher Motors and Philips Carbon. Together they will invest Rs. 8000 crores and generate 9000 direct jobs.

The new facilities will manufacture cars, commercial vehicles and tyre components. Yamaha's plant will be its biggest in India and will manufacture scooters. The highest investment will be Rs. 4,500 crore by Ashok Leyland-Nissan fro manufacture commercial vehicles.

The proposed investments give Jayalalithaa a headstart for her ambitious "Vision 2023" that aims 11 percent growth of the state's GDP in ten years. It is also nearly half the Rs 20,000 crore investment that the state government has committed in its budget for the year.

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Places close to the city such as Sriperumbudur, Orgadam and Chengalpettu now house several big auto companies and have long since emerged as the state's automobile belts.

[caption id="attachment_309598" align="alignleft" width="380" caption="A visitor inspects the 'Micra' car inside the newly-inaugurated Renault-Nissan Alliance auto plant in Chennai.Reuters"][/caption]

Light and commercial vehicle manufacturers such as Ford, Hyundai, Mitsubishi, BMW, Nissan and Renault; tyre companies such as Michelin, JK, MRF, Apollo and Bridgestone; and countless ancillary units, including at least 30 big names, that make various auto parts for both domestic and overseas markets, dot these belts.

The concentration of the auto companies and allied industries has also converted these distant suburbs into satellite towns and hubs of intense real estate development. Most of the country's big real estate companies are in various stages of township development, including affordable housing projects, in the area.

As of 2008, Tamil Nadu had the highest number of motor vehicles registered in the country followed by Maharashtra and Gujarat. In fact, between 2001-2008, the state has nearly tripled its output. The new investments will certainly propel the state into a much higher orbit.

The state government will need massive investments for realising at least a part of its "Vision 2023" and the commitment that the state has received from the auto companies is a good beginning. The state will require Rs. 15 lakh crore in ten years.

Besides Chennai, the Vision document proposed to develop nine more world class cities and high-end infrastructure comprising multilane highways, industrial and agricultural hubs, centres of excellence and so on. The Chief Minister, while unveiling the document in March, also promised a six-fold increase in the per capita income along with commensurate targets for human development.

This Times of India report has the details of the MoUs and investment.