1 October, 2020

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Surge Of Tamil Nadu In Vehicle And Ancillaries Manufacture

By S.Sivathasan

S.Sivathasan

Delivery of nearly 1.7 million vehicles a year, consisting of passenger cars and other types is the current performance in Tamil Nadu. By 2016, a figure of 2 million will be reached or surpassed. Most of the plants are clustered in Chennai. Adding strength to  manufacture of vehicles, is the fabrication of components. Another stream helping in high performance is the production of tyres. Tamil Nadu is now the automobile capital and the tyre capital of India. Together with components, where too she is foremost, an eminent position has been reached. In vehicle exports TN has an enviable share ranking first among the states. For vehicles  and components 35 percent in revenue is reported. With all these constituents, TN has emerged as the auto hub of India.

Attractions for Investment

From the fifties, Tamil Nadu (TN) enjoyed a reputation as one of the few well administered states of India. The Centre and the state being of the same political hue, they moved in tandem. On this account there was substantial funding from the centre for infrastructure and for industrialization. There was encouraging investment from other states as well. The most profound change in governmental policy came about in 1991 with liberalization and dismantling of much of license control constrictions. TN was advanced enough to profit by it and investment friendly policies came to be in place. They gave a spur to FDI and to the advent of MNCs, foreign technology and of personnel

With the green signal of liberal land allocation and fiscal incentives, discussions were initiated in 1995 for Ford and Hyundai to set up two major factories in proximity to Chennai. By late nineties they were on stream and both recorded remarkable performance. They became the template for other automobile investments to follow. Other prestigious names were BMW, Renault-Nissan Alliance and Mitsubishi. Except for the sixth, the other five have been on the growth mode ever since their inception.

The second largest truck maker in India, Ashok Leyland having a 28 % market share has three factories in TN. Its latest product to roll out of the Nissan platform in June this year through a joint venture is a multi-purpose vehicle (MPV) Stile. Apart from these is a Rs. 41 billion investment by Daimler on a state of the art facility for making Light Commercial Vehicles. There has been production for nearly a year. Apart from these are facilities for off road trucks by Komatsu going up to 49 tons. Among heavy equipment with traction are: Caterpillar dozers and excavators, John Deere back hoes and TAFE farm tractors.

For investment to be attracted, investors too should feel attracted. In this respect Chennai the capital, other principal cities and the regions in TN have become cleaner. The city is now livelier with parks, entertainment centres, shopping malls and five star hotels – just access Chola Grand on Google. The environment has been enhanced and with wider and better highways and feeder roads, commuting has become smoother. Law and order are well managed. TN in general and Chennai in particular have become more livable. In several surveys that were conducted by multiple agencies, TN and the cities have scored high, most conspicuously in proactive approaches to investment and speedy approvals. The cumulative result is a change of perception about doing business in Tamil Nadu.

Constituents of Success

Several Factors made for the evolution of business culture, first in Coimbatore. It is said that it started in mid nineteenth century with the influx of Gujeratis to Coimbatore as leaders of business and of finance. Tamils took to them responsively and imbibed their business acumen. This culture in its modern form spread to Chennai and to other cities in the state. The former integrated themselves with the latter assimilating their language and culture while retaining their own ethnic and cultural identity. There are many other ethnicities living in harmony in TN. Conspicuous among them in numbers as well as in the scale of investment in TN are Telugus from Andhra.

Tamils say with pride and others acknowledge with satisfaction that “Tamil Nadu provides a hospitable arbour to all those who seek it”. This most laudable trait in their culture, was extended with ease to make all aliens never to feel foreign. Chennai, the most cosmopolitan displayed this characteristic best. What explains? The line oft quoted from Tamil literature for two millennia is, “yaathum oorae, yaavarum kaelir”. Every village is my village and all its residents, my own kinsmen. The converse of it becomes all the truer, when foreigners are welcomed. In such a context, foreigners live happily and their investments flourish. The presence of a large number of Japanese and Koreans bears testimony. The automobile industry has grown in this environment and is set to move speedily on.

Managing the destinies of a state of 72 million people, advanced and irrepressible at that is too complex for a bare individual with a flare for cinema or skill at script writing. The collective effort of a multitude of disciplines contributes. A public service with IAS to set the tone, an academic community to develop the intellectual resources, an entrepreneurial class that manages industry and businesses, well trained engineers in vast numbers, a highly professional IT sector, world class medical personnel who have made Chennai the medical capital of the country, a vibrant banking sector and an alert press are all making their contribution to making the State for what it is. A prominently visible industry, automobiles and allied ones owe their success and pre-eminence to all of them. Political direction and leadership are certainly among them.

Talent Pool

In virtually every study and analysis of the critical factor promoting the selection of a state or location in a state for an automobile project or one in Information Technology, a factor that features prominently is the availability of a talent pool. When trained or trainable human resources are reckoned with, TN has had this advantage very significantly for 15 years or more. Graduates and those with Master’s have offered themselves for the high end segment. Diplomates were there for supporting the former. What accounts for a large pool? A vast number of Engineering Colleges and Universities and very many Technical Institutes which produce them.

A primary factor that tilts the balance in their favour, is the experience of Multi Nationals about their competence, trainability and work ethic. “The work we do, is the deity we worship” describes their attitude. For important positions in MNCs, selectees in large numbers are sent to their parent companies and for this a knowledge of English is vastly helpful. So it is with technical grades. All the obvious attributes apart, some are discerned only by the more subtle. To my query about their quality of work in TN, posed to a senior engineer from India 9 years ago, his answer was their high level of intelligence. Recently, a CEO from the North said in public that their ability is in their DNA. Tamil Nadu is benefiting by it despite the political digressions.

Infrastructure

When automobile MNCs came to Tamil Nadu with big time investment plans, they had export of vehicles and import of components, very much in their scheme of things. Harbour facilities and that too at a level of sophistication were envisaged. The Ports of Chennai and Ennore within about 30 miles of the auto cluster had a fair amount of facilities. In the last 15 years both have seen much expansion and development. The needed investment is under way to meet investor satisfaction. The prevailing capacity has played a great part in promoting the industry. They have Roll Off- Roll On facilities and large areas for parking.

The principal locations of Sri Perumpudur – Oragadam, Maraimalainagar and Thiruvallur are within easy reach for road transport. With heavy investment as of now, sustained planned development in the next 5 years and together with provision of appurtenant facilities, logistic support will be good enough to attract increasing investment and rapid expansion of the auto industry. Six lane highway and elevated highway to and from the harbor together with Outer Ring Road, all under construction are to enable ease of transport.

Sri Perumpudur – Oragadam area has become the foremost industrial cluster in TN. In response to its emergent status, housing on a massive scale under the aegis of the private sector commenced a few years back. It is transforming the landscape and the skyline, besides fulfilling an essential condition for growth. Pedestrian housing, affordable, affluent and opulent are proceeding apace.

Component Manufacture

Even prior to the advent of auto MNCs, TN has had a history of foundries, vehicle, equipment and component manufacture. Liberalisation policies of the nineties opened the door to competition and compelled modernization. To investors after mid-nineties central and state governments prescribed localization norms to qualify for fiscal incentives. With quality improvement commenced exports and importing countries enforced stringent standards thereby promoting technical collaboration to stay competitive. Thereby a situation has evolved for quality components being available for increasing localistion. Nissan, the latest auto facility which started with 88% localization in 2012 will reach 100% in 2016. This transition speaks for the quality of local components.

To support the automobile industry and also to derive mutual benefit, is the Tyre Industry in TN. Of late it has grown to giant proportions to make Chennai the tyre capital of India. Home to Michelin, Apollo, MRF (Madras Rubber Factory), JK and ATC, Chennai encompasses another essential component in vehicle manufacture. For Michelin, Chennai is the first plant in India. It is a Rs. 40  billion facility, and will produce 20 million tyres per annum at full development. According to Nicholas Beumont, President and MD, it will be the largest among the production facilities of Michelin. Apollo Tyres is a greenfield plant and one of the largest. It commenced production in early 2010. As a highly automated one it uses robotics and IT driven systems extensively. MRF is the Tyre of Choice for Rolls Royce. It has won the Ford World Excellence Award.

In tyre manufacture as in many others, TN is profiting from the investment made in education particularly in technical instruction and that too in the English medium. As for tyres, she also benefits from her proximity to Kerala, which produces as much as 90% of India’s natural rubber at around 750,000 tons per annum.

Ready at hand for the automobile industry at Sri Perumpudur was Saint Gobain Glass, the second largest concern in the world. It has besides other facilities – two automotive glass processing lines for: (1) Laminated windshields for 500,000 cars and (2) Tempered glass for 1 million cars. This can be scaled up for 2 million cars.

Research and Development

In a world of technology and competition, innovate or perish has become the credo not only to advance but to survive. In India, TN is said to spend the highest amount on Research and Development in the automotive sector. Mahindra & Mahindra one of the largest firms in India, has established Mahindra Research Valley (MRV) in Chennai at Rs.6.5 billion. It employs 1,500 engineers to develop prototypes and components, which are then transferred to different plants of M&M. Operational for an year or so its scope and potential will widen in the coming years.

NATRiP is a state of the art automobile testing facility established by the Central government and funded at Rs. 5 billion. It is at Irungkadukoddai adjacent to Oragadam, where the action is. It is said to be the best such in India and of world class capability, meeting global standards. It has a sophisticated testing track as well. Daimler has set up its own test track to test vehicles under Indian road conditions.

By all accounts it may be seen that automobile manufacture is being approached most comprehensively by all who are competent in the field. As of now India ranks 6th in the world and Tamil Nadu holds the 1st position in India. Every prospect in TN is positive.

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Latest comments

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    Thanks Dear Sivathasan, though i am overwhelmingly happy for Tamils progress in industrial sector and impressive growth in education and health sector, I see in last two decades, the agricultural growth is on steady decline and our woes continue.Hopefully the plan envisaged by current government will address atleast to half of the problems in agricultural sector.

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      I am wondering why Tamils are not moving back to Tamilnadu ?

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        Jim softy

        “I am wondering why Tamils are not moving back to Tamilnadu?”

        It is very decent of you to be polite.

        I ponder whether you have thought about your Sinhalese people going back to your ancestral land where you might find decent jobs.

  • 0
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    Surge Of Tamil Nadu In Vehicle

    The only part which does not make any noise is the horn in Indian motor vehicles

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    The impressive growth of Tamilnadu in the past 30 years has been IN SPITE of the venal political leadership – and not BECAUSE of them.
    The credit must go entirely to the movers and shakers in the private
    industrial and trading sector. An educated (largely English) and
    fairly disciplined support and work force have been additional factors.
    The huge explosion of Real Estate prices in Chennai and the major cities in the State in the past few years is indication the State is now drawing investment even from within India (Delhi, Mumbai, Bengaluru, West Bengal. Of course, diaspora capital of Tamils overseas is playing its role here.

    Still, it is a shame for years Chennai suffers a daily two hour power-cut with some Districts areas in the State suffering 10 hours a day. Action in Water – and more specifically drinking water – needs urgent attention. This is the challenge for the MGRs, Karunanidhis and the Jay Lolitas – where everyone of them have competed against each other in their common failure. As a wag there commented, if the loot political leaders have accumulated in the past 30 years is spent on Electricity, Water and improvement of road-transport infra-structure Chennai can be another industrial and economic power base in the vast country.

    It is more than possible due to the collapse of education, health-care
    and economic opportunities here, there can be an increasing number of Sri Lankans heading towards Tamilnadu – a reverse journey from that of the pre-1950s. Not just Tamils – but those from other communities as well.

    Senguttuvan

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      Dear Senguttuvan,

      The power cut across the state had been reduced and restored to normal level in last three months, one should commend the laudable efforts by government in this regard. The current govt had veiled certain clean city and health management program which will definitely solve many problem. Also i love to see my srilankan brothers taking vast opportunities here than biharis and WB people occupying the place and availing opportunities.

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    Senguttuvan

    Vladimir Nabokov wouldn’t turn in his grave but MGR would for Amma is not 12 year child anymore.

    Disgusting comparison though I like it.

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      NV,

      I admire your depth in reading. Always delighted to read your charming ripostes. I saw the movie and still remember Peter Sellers doing a superb role.

      JJ was, I think, in her 30s when she entered the large heart of the
      Keralite – said to be a Menon from Kandy. I still remember the campaign of Paul Pandian, who I believe was a one time Assembly
      Speaker – who reminded the electorate “she can’t ask the people to vote for her because she slept with so-and-so” And, out of wedlock too. But the teeming uneducated masses there did – more than once.

      Senguttuvan

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        Senguttuvan

        It seems all quiet in the southern front. Is J Lolita positioning herself for the big job?

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          Dear NV,

          JJ in Delhi? In my reading – no way. She probably would love it
          as she is possessed of a monstrous ego. But she has little support with the CMs of other States. Her proximity to Narendra Modi is more Modi’s calculations to have JJs support if the BJP, even coming in a Coalition, cannot muster sufficient seats in the Lok Sabha. As you know, as things stand, it is more than likely it will be a hung Lok Sabha again. The closest candidate for PM from Chennai in recent times was P. Chidambaram. Sadly, the collapse of the Indian Rupee has put paid to his chances.

          But between now and the next General Elections much can happen. The recent subsidised essential food prices programme for the poor will bring new votes to the Congress.

          Senguttuvan

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          Native vedda,

          Yes, true man, she is aiming for PM post something like devgowda government. Her calculation, in the event of both major parties winning around 150 votes, she can form third front alongside of Samajwadi, Nitin etc, However elevation of Modi to top post by BJP garnered some vote base for BJP. And congress with all its gimmicks like food security bill, marriage amendment bill is set to loose.

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            manisekaran

            Time to time the Hindi belt Hindians belittle South Indians notably when Gowda and Rao were running the show as Prime Ministers.

            What chance has JJ got this time around given that very little criticism about her “adopted family” is in the news.

            If she does aim for the job when will the CBI raid her house, cars and dusts old files on her?

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              In TN, it is predicted that AIADMK will win at least 30 seats. However her dream of becoming PM will be only pipe dream as BJP is going to be highest seat winning party though it might not have adequate seats to form government. In such case, she may lend support and may request for Deputy PM like devilal in Janata dal government.

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        “she slept with so-and-so”

        she slept and whenever she left MGR wept.

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        Does Vaiko think the Naduans are stupid,to persuade them to migrate to a Tamil Eelaam in Ravana Land although it is going to be run by the Vellalas?.

        Shouldn’t he be out there trying to stop the Economic migrants from Sengutuan’s turf, taking the boat to Madras, now that Native’s land has put up a detour sign direct to the Manus?.

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          Sumane,

          Some years ago, in the position I was in I was able to use influence to find employment for some Lankan lads (Sinhalese included) in the Indian IT industry. There was then demand for Management positions in the Garment export industry in which the Indians conceded Lankans match well. Reader Manisekeram (from Tamilnadu?) here wrote he prefers to see Lankans manning the (labour) jobs now filled by workers from Bihar, U.P and Orissa. I believe our workers will find positions in the farming and other industries in Sri Lanka and would rather wish for positions as
          Clerks, Secretaries, and lower level Managers and so on in the growing opportunities in the South of India. But for this the political leadership from both sides should ensure a warmer relationship between the two countries.

          Senguttuvan

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            Mr Sengutuan,

            You think even our non Vellalas want to join Manisekeran to shovel it in Nadu farms?.

            Hasn’t this Mani got any confidence in Vellalas?.

            One thing for sure is Maniskeran’s Godess doesn’t need to import any Super Phosphate.

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            No, I am sorry Senguttuvan if my writing appeared that way, definitely not. I mean there are many skilled jobs being taken by North Indians in TN, which I would love to see being taken by Tamils in srilanka. There are manuy agri based business opportunities as well as in medium scale industry sector. Example ITI medium skilled technicians.( who are hired as senior technicians in industries)

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              Thank you, Mani, for the clarification. Please keep writing. We need more and regular views from Tamilnadu than those expert views of our friends Prof. Suryakumaran, Col. Hari, N. Sathiyamoorthy et al.

              Please write on the emerging voice of the movement of University students, the organised opposition from the film industry world,
              the new Balachandran movement and so on. These appear to me to be far more lethal than the usual Vaiko, Seeman, Tholar voices – which are more region-centred. The voice from Tamilnadu
              will be a defining voice in the search for our peace and unity
              in the coming years is my reading. GoSL fails in sending non-effective persons to man our Chennai consular post, which has lacked efficient diplomats since Sumith N and Krishnamurthy.

              Rgds/Senguttuvan

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    “Tamil Nadu is now the automobile capital and the tyre capital of India.”

    hambantota is the white elephant capital of srilanka

    excerpt from global mail link given in Eric ellis’s article in CT

    “In the mostly Sinhalese ‘deep south’ of the island, President Mahinda Rajapaksa’s home region of Hambantota is being lavished with the country’s biggest infrastructural project, a US$1.5 billion stampede of white elephants that’s giving the town a new port, international airport and cricket stadium – all named after President Rajapaksa – and a convention centre and even an alternative Bollywood complex.”

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      shankar

      Let us hear some dirty jokes about MGR.

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