China to Chennai: New auto investments likely to come into Tamil Nadu

The state is among the top 10 automobile clusters in the world pumping out 1.3 million passenger cars a year. CHENNAI: The ongoing trade war between the US and China has resulted in two auto component makers one each from Korea and Taiwan exploring options to shift their existing plants from China to Chennai.

The state government’s industrial promotion arm — SIPCOT (state industries promotion cooperation of Tamil Nadu) — is trying to seize this opportunity and is planning to set up a ‘plug and play’ facility for auto parts makers in its industrial parks.

It has appointed a consultant to help prepare a Detailed Project Report (DPR) for this move. “SIPCOT has about 1,000 acres of land in different industrial parks near the city, largely in Vallam-Vadagal and Cheyyar. The land parcels can be utilised for the purpose on build-own-operate-transfer (BOOT) or public private partnership models,” a senior industries department official told TOI.

A Korean maker and a Taiwanese manufacturer operating units in China have approached the authorities for land allocation. “Tamil Nadu already has the eco-system in automobile manufacturing sector. However, these overseas manufacturers are looking for plug and play facility and this sparked us to explore it in SIPCOT,” the official said.

The state is among the top 10 automobile clusters in the world pumping out 1.3 million passenger cars a year. It is home to domestic and global giants including BMW, Ashok Leyland, Ford, Hyundai, Citroen, Renault and Nissan besides TVS Motor, Royal Enfield and Yamaha. More importantly, the state makes up for one in every three auto parts made in the country by value, or 35% of all auto parts that are made in the country are manufactured in the state.

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The planned ‘plug and play’ facility will have built-up structure with power and water supply besides necessary infrastructure required for commencing the operations in quick time. “A unit needs three years to start functioning if vacant land parcel is offered. At the same time, it takes eight to nine months in a plug and play facility to resume operations,” the official said.

S Chandramohan, chairman of the Tamil Nadu chapter of Confederation of Indian Industry (CII), said that there was a huge opportunity for the state to attract the attention of big names that were looking for an alternative to China.

“Not just in automobiles, but also in leather, textiles, chemicals, and other sectors, as well. What these global players are looking at are not adhoc arrangements. They want to know how fruitful is my investment going to be and then, how fast can I commence my operations,” he told TOI.