A rib making rounds among the industry circles today is to ask a person who the next car manufacturer to start production in Chennai is. Everybody says Peugeot, but the answer is Renault.
While the Peugeot Citroen is yet to decide whether its tent in India will be pitched in Tamil Nadu or Andhra Pradesh, Renault is here, and will produce cars from the State.
Peugeot is playing it close to its chest, and people in Tamil Nadu (bureaucrats, industrialists, journalists) are waiting for the French car makers' decision the way spectators would wait for the third umpire's decision for a run-out.
In the intensity of the wooing of Peugeot, the names of two other car manufacturers have got edged out of active memory — Renault and Mahindra & Mahindra.
Count them in, and assuming that Peugeot will choose Tamil Nadu over the State's northern neighbour, and what have you?
An enviable list of (eight) car manufacturers with a total nameplate capacity of over two million cars a year.
In addition to these, there are the commercial vehicles manufacturers (Ashok Leyland, Ashok Leyland-Nissan joint venture for LCVs and Daimler), with a total capacity of 3.6 million commercial vehicles.
Then there are construction equipment makers — Caterpillar, Komatsu and the joint venture of Ashok Leyland and John Deere.
Balance sheet
The automobile balance-sheet of Chennai reads as follows: Seven car plants, three commercial vehicle units, two earth moving equipment centres and five vendor parks.
While many know of the automobile plants in Tamil Nadu, the size of the base of the pyramid, viz., the vendors, is less talked about.
Hyundai has the highest number of vendors in Tamil Nadu — 532. Ford has far fewer—around 65, but Nissan, with its rapid indigenisation programme is set to bring in over a hundred of its suppliers to Chennai. About 25 have already been allotted land.
Tamil Nadu today accounts for 35 per cent of auto components produced in the country and when Nissan, Renault, Mahindra and possible Peugeot populate their vendor parks, the State's share could go up to 40 per cent.
The region that is home to automobile companies in Tamil Nadu is a corridor shaped like a half ‘U', running between Tiruvallur to the North West of Chennai to Maraimalainagar to the South of the city — a distance of about 80 km.
Detroit of India
Mahindra and Peugeot (if and when it comes to Chennai) will alter the geometry a bit, but the mass of activity in the neighbourhood of the city proves that it is not for nothing that it is called the Detroit of India.
Now, what is the secret of the chemistry between automobiles and Tamil Nadu?
Well, there is no chemistry — just a process of evolution.
The story goes back to the days immediately after Independence, when entrepreneurs sowed the seeds for auto components groups such as TVS, Amalgamations and Rane.
When the auto sector was opened up for foreign participation, the presence of the vendor base, and of course, the proximity to a sea port, attracted Ford and by the time the neighbouring States were still awaiting their break, Tamil Nadu had three car plants — Ford, Hyundai and Mitsubishi-Hindustan Motors.
Over the next 15 years, the number would grow to nearly three times as many.