TN to come up with auto city, clusters for OEMs in south

Move aimed to attract investments in the autosector

This story has been modified. Please read the clarification at the end of the article.

Tamil Nadu is planning to set up the country’s first auto city under a joint venture (JV) to cater to the needs of both domestic and global auto manufacturers in component designing, prototyping, and re-manufacturing.     

The new auto city, typically an industrial park, would come up in 1,000 hectares. The park would have a common infrastructure including effluent treatment, drainage, solid waste management and utilities including power, gas and water.

The state under the automotive policy aims to double the auto production volume to five million units per annum by 2020.

Also on the cards is the Automotive Industrial Development Centre (AIDC), which would offer investment facilitation services to companies that are looking at investing in the automotive industry in the state.

Apart for these, the government is planning to create new clusters for the original equipment manufacturers (OEMs) in  Tiruchirappalli, Tirunelvei and Thoothukudi.

Hyundai Motor India Limited (HMIL) managing director and chief executive officer, BS Seo said, “the new auto policy clearly underscores the government’s intent in catapulting Chennai into the top 5 global auto clusters. The state has an excellent infrastructure, which has attracted major global automakers here. This policy will further enhance this position. The policy seeks to create new clusters in Trichy, Tirunelveli and Tuticorin and assures an additional power of 6,200-Mw to the industry--a step which will definitely accelerate growth”.

For HMIL specifically, he said, the announcement of providing rail - port connectivity was a welcome move, as it would not just facilititate speedier movement of consignment, but also make it safer and reduce the pressure on road transport.

“Auto policy is welcome from Nissan's perspective as it treats auto as a public utility from Industrial Disputes Act, 1947 to prevent flash strikes etc. Also it will attract more investment in Tamil Nadu and support vendor development and overall improvement in logistics and talent cost thus improving value chain,” said Sunil Rekhi, CFO, Nissan.

Ford spokesperson commented, “We welcome the new auto policy of Tamil Nadu and hope that it would support Tamil Nadu to bring in more automotive FDI into the state."

Fiscal incentives

Automobile hubs and clusters In the state would get a 50 per cent stamp duty concession and additional capital subsidy of five per cent.

Tamil Nadu is currently home to international brands including Ford, Hyundai, Renault, Nissan, Mitsubishi and BMW. The collective capacity of these is 1.38 million units per year. It is also home to commercial vehicle manufacturers like Ashok Leyland, Daimler among others.As far as auto components is concerned, the state accounts for 35 per cent of India's production, estimated to be around $6.2 billion.

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Clarification: The orignal article didnot have comments from Ford and Nissan, which have been added later.