The Hindu Business Line : Pune on the ‘Autobahn’

A file picture of robots assembling passenger cars in the Tata Motors manufacturing unit at Pimpri.Scooters under production at the Chakan plant of Bajaj Auto Ltd.

Scooters under production at the Chakan plant of Bajaj Auto Ltd.

Alka Kshirsagar

Through the years, Pune, western Maharashtra’s largest city after Mumbai, has worn many caps. As the home for several sterling institutions of higher learning, it earned the moniker of the Oxford of the East; as the chosen destination for post-retirement habitation, it got dubbed as the pensioners’ paradise, as a place blessed by the weather god, it notched a great tally.

On the industrial front, Pune’s large pool of skilled, industrious, readily available manpower, and no serious shortage of utilities, made it an ideal location for manufacturing units of all manners. The engineering industry first came and established itself here. Next, it was the IT industry that made great strides. And now, with several international carmakers setting up shop here, the city is gearing up for its emergence as a global hub for the auto industry.

Realistically speaking, the Pune auto story began in the early 60s when Tata Motors and Bajaj Auto were amongst the first to set up manufacturing plants on the outskirts of the city. Almost 30 years on, a series of events took place that augured well for industrial growth in general and the auto industry in particular.

Connectivity

The Mumbai-Pune Expressway put in place a vital missing link – connectivity. Secondly, auto majors across the world began looking at India seriously. Thirdly, the Maharashtra Government made an aggressive sales pitch for Pune and the surrounding Talegaon-Chakan-Ranjangaon belt as a great destination for auto companies.

The outcome: global majors Volkswagen, General Motors, DaimlerChrysler, Fiat plus domestic leaders such as Tata Motors, Mahindra and Mahindra and Bajaj Auto, which already has modern plant to produce the Pulsar here, announced plans to set up greenfield projects and make big-ticket investments in the region. Naturally, the existing auto component industry too got a huge shot in the arm.

Elaborating on GM’s choice of Pune as the location of its second plant in India, Mr P. Balendran, Director and Vice-President, Corporate Affairs, says, “Pune has a large supplier base. Tomorrow, when we start exporting, the (Nhava Sheva) port is just two hours’ drive away. Also, the western region is our second largest market after the north, and logistically, this plant can cater to both southern and northern markets.”

GM, which already has a plant at Halol, is investing Rs 1,400 crore at Talegaon, and will look at global sourcing from India, scouted 12 States before firming up on this one location. The plant, that has an installed capacity of 1,40,000 units, will produce a small car – a variant of the Chevrolet Spark. It will go into trial production by April 2008.

VW Investment

With a proposed investment of Rs 2,400 crore at Chakan, the German auto company Volkswagen has even bigger plans. After ending what was also a nation-wide search for a location, it opted for Chakan. The company has already launched the Passat, which is presently being assembled at the Skoda plant in Aurangabad. Work on the new plant has begun, and once it is commissioned, it will manufacture the small car – expected to be the Golf – later next year in addition to engines for its cars.

Luxury carmaker DaimlerChrysler India that presently operates from Tata Motors’ premises at Pimpri, has invested in a 100-acre plot of land at Chakan. It is scheduled to move its manufacturing operations to the new site by early 2009, and in addition to its range of diesel and petrol Mercedes cars, will manufacture trucks and luxury buses here.

In its second innings in the country, Italian carmaker Fiat has tied up with Tata Motors to set up a joint facility in Ranjangaon for the manufacture of cars and power trains. The total investment in the joint venture is Rs 4,000 crore. The first Palio Stile was rolled out from the plant recently, and models like the Grande Punto and the Linea are due for launch in the months to come.

On its part, Tata Motors, which already has a huge facility to manufacture commercial vehicles and passenger cars at Pimpri is adding to its existing portfolio. A new variant of the Indica is due for launch later this year, while its hugely successful commercial offering the Ace, its passenger variant, the Magic, as well as the panel van Winger are amongst the products manufactured here.

Supplier base

Riding on the back of the burgeoning auto industry is a huge supplier base that also includes several small and medium scale enterprises. Bharat Forge, the Rs 6,000 crore plus company, makes forgings for the auto industry amongst other applications. Bosch, Kinetic Engineering and Autoline are among the other big players in the fray.

Given this backdrop, it is not surprising that the country’s first auto cluster that began operating a year ago from rented premises moved into own building a few months ago. The country’s premier testing and certification institute – the Automotive Research Association of India – is also located in Pune. All these are factors that have, literally speaking, helped put this growing mini-metro on the autobahn of industrial progress.

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