Why Chennai is called Detroit by India

Visit to Chennai, the "Detroit of India"

The settlement of international car companies in the vicinity of the capital of Tamil Nadu has given Chennai the reputation of the automobile metropolis of India. Local suppliers and available skilled workers are decisive for the choice of location for global corporations.

Gunshots are fired and roadblocks erected in Kolkata to prevent the establishment of industrial zones in the city's catchment area. In Mumbai, farmers and urban NGOs have joined forces to prevent the establishment of a special economic zone south of the city. But in the area around Chennai, the third of the four big Indian metropolises, the farmers cannot wait to sell their land to one of the industrial parks that are springing up. "They leave the land undeveloped for three years because the law only allows agricultural land to be used for industrial purposes if it has been fallow for at least three years," says C. Narasimhan, a former president of the Sundaram-Clayton auto parts company. The corresponding result can be seen everywhere along the major arterial roads of the capital of the state of Tamil Nadu. While the old coastal road to Mahabalipuram has mutated into an IT corridor, a “Mahindra World City” is being created on the road to Madurai, and today the industrial center of Sriperumbudur is located on the Bangalore Highway.

Economic prosperity

Among the four metropolises, Chennai, as Madras has been called (again) for ten years, has enjoyed the reputation of a somewhat sleepy, conservative provincial city for a long time, which prefers to indulge in local politics and caste quotas, traditional music and dance rather than aggressive industrial renewal. Even today, the residents of the city have plenty of time to think about the fortunes of Chennai. But when they're stuck in the city's hustle and bustle, they no longer do it voluntarily. And unlike other cities, with the thousands of cars, motorbikes and tricycle rickshaws, they pay the price for the economic success of their city. Because, more than anywhere else, it is the auto industry that is helping Chennai to overtake other industrial regions. And the numbers are scary: 9 million motor vehicles were produced in India in 2006, including 1.5 million passenger cars and half a million trucks. A quarter of these vehicles come from Chennai.

Shortly before Mahindra World City is a large Ford plant, behind it is the new BMW factory. In Sriperumbudur, Hyundai's factory site is currently being doubled, in line with the Koreans' plan to make Chennai the global center of their small car production - apart from the 200,000 units they hope to sell in India in 2007. The Mitsubishi Lancer is also manufactured nearby, and Renault and Nissan, with their joint venture partner Mahindra & Mahindra, have just announced that they will be building a manufacturing platform for a full range of vehicles nearby. In addition to the automotive industry, international manufacturers of cell phones (Nokia, Flextronics) and other electronic consumer goods (Samsung, Dell) have now established themselves in Sriperumbudur.

Suppliers and experts

Chennai is not the largest auto city in India. Delhi with the dominant market leader Suzuki-Maruti and Honda is bigger, and Pune with Tata Motors, Bajaj, Daimler-Chrysler and soon Volkswagen employs almost the same number of people. Nevertheless, the two cities do not dispute their southern rival for the title of "Detroit of India". Chennai has not only managed to attract car giants and suppliers. The city has the advantage that its own auto component industry has been based there for years. Many of the major international suppliers now have cooperation agreements with Indian partners. In 2006 the supply industry grew 29% with sales of over $ 10 billion. Exports grew even faster (by 37%) to over $ 1.2 billion.

This is an important locational advantage for the large car manufacturers who are already buying more and more parts. Arvind Mathew, head of Ford India, says 75% of the end product of the Ikon, Fiesta, Fusion and Endeavor brands comes from the immediate vicinity. At Hyundai, says head of administration S. Ganapathy, the figure is as high as 90% - no doubt also thanks to the fact that many of the Korean salespeople have settled in the vicinity of the Hyundai plant. "When we came here, most of the suppliers were only focused on Maruti-Suzuki," says Mathew. “Today they are world class. You export directly or do it using product blocks that we deliver to other Ford plants. " What does Chennai have ahead of its Indian rivals? It cannot be the physical infrastructure alone, because Chennai actually only has the nearby port compared to Delhi and Pune. The expressway to Bangalore is still not completed, there are railway lines, but the Indian Railways are not able to quickly build a double track and increase the number of train compositions, although a large wagon factory is located on the outskirts of the city. In front of the loading ramps, columns of trucks stretch out, which have to bring their goods over the short distance of 40 km to the port. And the several thousand Hyundai and Ford workers drive back to the city every day in factory buses at a snail's pace, while they can dream of the fast runabouts they have been making all day.

Chennai's infrastructure advantages are elsewhere. Tamil Nadu produces surplus electricity and the supply of skilled workers is not yet showing any signs of exhaustion. The poaching of workers has increased, and Arvind Mathew only smiles sourly when asked about the hunger for skilled workers of his new neighbor BMW. But the constituent state benefits from the fact that it has been pursuing a quota policy for lower castes for decades, which has created a huge and knowledge-hungry pool of school leavers, who also feel no caste prejudice against manual work. Tamil Nadu opened up technical education to the private sector earlier than other states, and in the last 15 years the 14 engineering colleges have been joined by another 260. It is also workers, say Ganapathy from Hyundai and Mathew from Ford, who have escaped the poverty trap and are doing everything they can to avoid falling back into it. "We gave our workers the freedom to form a union, they refused," says Mathew.