The Hindu : Business : Four auto hubs suggested for Tamil Nadu

Online edition of India's National Newspaper
Friday, Mar 25, 2005

Business

Business

Four auto hubs suggested for Tamil Nadu

By Our Staff Reporter

CHENNAI, MARCH 24. Riding piggyback on the resurgence in the manufacturing sector, rise in export of vehicles and components and services such as designs, engineering and back-office operations, the Indian auto industry will be on the fast lane with an estimated turnover of $ 66-69 billion in 2015.

Forecasting the roadmap for the industry, a study commissioned by the Tamil Nadu Council of the Confederation of Indian Industry (CII), says as per the `Vision 2015' document, Tamil Nadu, at present accounting for one-fourth of the country's automotive output, should target a 30 to 35 per cent share. In terms of net output value ten years down the road, the auto industry in the State will have a turnover of $18-20 billion.

Given its inherent advantages, such as availability of skilled manpower, good work ethic and a general reputation for quality in manufactured goods, Tamil Nadu can aim big in the automotive sector. Implementing Vision-2015 would, however, call for an incremental investment of $5 billion in the State.

Stating this, T. T. Ashok, Chairman of CII (Tamil Nadu), said the study by ICRA Management Consulting Services anticipated that between 60 and 70 per cent of the investment would come from multinational corporations. The existing players in the country would make the rest of the investment.

The road ahead for the State would not be easy, as Haryana, Maharashtra and Karnataka in the country and China and Thailand in the south and Southeast Asia would be competing with it for the investments. Therefore the report urges the State Government to declare the automotive industry as a thrust sector; set up automotive parks, reinforce the `Made in Tamil Nadu' brand and establish it globally and encourage small and medium enterprises to become viable and sustainable. Specifically, it said, the Government should endeavour to create four hubs — around Chennai, Coimbatore, Hosur and Madurai.

Mr. Ashok said the growth of the auto industry could be swift and smooth with initiatives to improve the labour productivity levels, flexible labour laws, creating requisite infrastructure to facilitate more exports and an improvement in the product quality standards.

Releasing the report at a CII conference on `Tamil Nadu as a manufacturing hub,' on Thursday, V. Krishnamurthy, Chairman, National Manufacturing Competitiveness Council, said the auto industry would continue to be the prime mover of economic growth.

R. Seshasayee, Managing Director, Ashok Leyland, called for value-addition to products, skill development of the workforce and greater interaction with educational institutions to improve designs.

A past president of the CII, Subodh K. Bhargava, underlined the need for more innovation in manufacturing and use of the IT (information technology) tools to manage the challenge of globalisation.

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