Economy

Riding on the auto sector boom

Roudra Bhattacharya | Updated on February 24, 2011

volks   -  Business Line



With the domestic auto market showing rapid growth in the last few years, the Aurangabad industrial belt has attracted significant investments from the sector.

Though Bajaj Auto was the first major automaker to set up base, it has been followed by other global original equipment manufacturers (OEMs) from the Volkswagen Group, Audi and Skoda.

Prosperous growth

The prosperous growth of Aurangabad as an industrial town is evident from purchase of around 150 Mercedes-Benz sedans by businessmen of the region last November. The purchase, the single largest order for the German carmaker in India, also brought the city national fame.

The presence of the three auto companies, combined with a proximity to the Pune auto hub just four hours away, has also led to a huge component supplier base mushrooming in the region such as Goodyear Tyres, Verroc, Endurance and Yash Birla group company Birla Precision Technologies. The nearby Pune - Chakan belt also has a variety of investments from auto majors such as Volkswagen, Mercedes-Benz, Tata Motors and Mahindra. “There is enough money and entrepreneurship in the region, but this has got national prominence only very recently. The advantages of Aurangabad include highly skilled labour and cheaper prices of land over Pune. Thus it is very competitive to manufacture components here and send them to OEMs in Pune,” said Captain Piyush Sinha, President, Chamber of Marathwada Industry and Agriculture.

He added that land in Aurangabad is 200-300 per cent cheaper over Pune and Chakan, where most of the industrial land has already been allocated. The region also has 57 Industrial Training Institutes (ITIs) that churn out thousands of skilled workers every year. Mr Sachin Sanghvi, CFO, BPT said, “The region is very ideal, because it has people with very high skill sets combined with good infrastructure and connectivity. Plus, our customer base is all nearby. Most of our Group companies working with the auto sector are present in this region.”

Additionally, the industrial city also falls on the railway line to Mumbai and has an inland depot for cargo. This makes it easy for export-oriented industries to transport heavy goods to Jawaharlal Nehru Port Trust (Navi Mumbai port). It also has good road connectivity through the golden quadrilateral and is serviced by all major airlines to the big cities of the country.

Well-connected to metros

“The location of Aurangabad is very convenient, since its central to the Western, Southern and Northern parts of the country. It is also well connected to all major metros and many of our auto clients are also nearby,” said Mr D.P. Singh, Vice-President, Consumer Business, Goodyear India.

With the region proving to be so beneficial for automakers, even more automakers are believed to be eyeing the region. According to sources, a certain US-based automaker is currently doing a feasibility study for setting up its second Indian plant in Aurangabad. In addition, another domestic bike-maker is also reportedly evaluating an investment in the region.

Published on February 24, 2011

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