{"id":101901,"date":"2013-08-23T10:24:43","date_gmt":"2013-08-23T04:54:43","guid":{"rendered":"http:\/\/www.colombotelegraph.com\/?p=101901"},"modified":"2013-08-27T18:43:59","modified_gmt":"2013-08-27T13:13:59","slug":"surge-of-tamil-nadu-in-vehicle-and-ancillaries-manufacture","status":"publish","type":"post","link":"https:\/\/www.colombotelegraph.com\/index.php\/surge-of-tamil-nadu-in-vehicle-and-ancillaries-manufacture\/","title":{"rendered":"Surge Of Tamil Nadu In Vehicle And Ancillaries Manufacture"},"content":{"rendered":"

By S.Sivathasan<\/a><\/span> –<\/strong><\/strong><\/p>\n

\"\"<\/a>

S.Sivathasan<\/p><\/div>\n

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\u00a0 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 \u00a0and components 35 percent in revenue is reported. With all these constituents, TN has emerged as the auto hub of India.<\/p>\n

Attractions for Investment<\/strong><\/p>\n

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<\/p>\n

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.<\/p>\n

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.<\/p>\n

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 \u2013 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.<\/p>\n

Constituents of Success<\/strong><\/p>\n

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.<\/p>\n

Tamils say with pride and others acknowledge with satisfaction that \u201cTamil Nadu provides a hospitable arbour to all those who seek it\u201d. 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, \u201cyaathum oorae, yaavarum kaelir\u201d. 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.<\/p>\n

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.<\/strong><\/p>\n

Talent Pool<\/strong><\/p>\n

In virtually every study and analysis of the critical factor <\/strong>promoting the selection of a state or location in a state for an automobile project or one in Information Technology, a factor that features <\/strong>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\u2019s 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.<\/p>\n

A primary factor that tilts the balance in their favour, is the experience of Multi Nationals about their competence, trainability and work ethic. \u201cThe work we do, is the deity we worship\u201d 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.<\/strong><\/p>\n

Infrastructure<\/strong><\/p>\n

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.<\/p>\n

The principal locations of Sri Perumpudur \u2013 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.<\/p>\n

Sri Perumpudur \u2013 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.<\/p>\n

Component Manufacture<\/strong><\/p>\n

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.<\/p>\n

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\u00a0 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.<\/p>\n

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\u2019s natural rubber at around 750,000 tons per annum.<\/p>\n

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.<\/p>\n

Research and Development<\/strong><\/p>\n

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.<\/p>\n

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.<\/p>\n

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<\/sup> in the world and Tamil Nadu holds the 1st<\/sup> position in India. Every prospect in TN is positive.<\/p>\n","protected":false},"excerpt":{"rendered":"

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