The Hindu Business Line : Chakan too gets caught in clutch of auto gloom

Pune, Dec. 10 In addition to auto units, the country’s emerging auto hub, Chakan, too is bearing the brunt of the slowdown in the sector, as many would-be manufacturers appear to have put their plans to set up base here on hold, at least temporarily.

At last count, some six months ago, the wait-list for investors who had filed applications for land with the Maharashtra Industrial Development Corporation (MIDC) was 1,800-plus strong. Most of these were auto component manufacturers, about 30 per cent of which were from overseas.

The only reason that they did not get on with their projects was that with the land acquisition process in limbo for years, there was just no land available for disbursement.

The interim months have changed the situation dramatically.

According to a source, though no cancellations have happened, the continuous follow up from potential customers regarding the status of their applications for land has stopped since the last couple of months.

The low demand, has, in turn, impacted the price of land, which developers in the region estimate has plummeted to the extent of 40 per cent.

A year ago, farmers holding small land banks drove hard bargains, and getting them to the negotiating table to agree on a price took a great deal of persuasion and constant follow-up.

Today, the tables seem to have turned, as it is the farmers who are calling up the offices of the MIDC to enquire about the next round of meetings. In the absence of ready clients, MIDC too is in no hurry to oblige.

At another level, the lower valuation of land in the area has impelled banks to review signing of tripartite agreements, and not a single new agreement has been signed during the past three months, the source says.

Interestingly, the situation does give a breather to MIDC authorities as the process for acquiring nearly 4,000 acres of land has been plagued with tardiness and red tape for over 10 years.

By all appearances, by the time the next boom comes round, the land banks will be ready and waiting for customers.

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