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Automobiles Fuel Investment Surge In Tamil Nadu

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  • While the state government explores electronics, green energy, defense, and aerospace, the automotive industry remains the top investment choice
  • Major investment is from just three automobile companies, driving 79% of INR 25,535 crore investments

In a landscape dominated by the relentless march of technology, one industry remains the driving force behind Tamil Nadu’s investment juggernaut. As the state government ambitiously diversifies into electronics, green energy, defense, and aerospace sectors, the automotive industry stands tall as the primary beacon of attraction. Guidance Tamil Nadu’s latest data unveils a compelling narrative, amidst 17 MoUs inked this fiscal year, totaling a staggering INR 25,535 crore in investments, a mere three auto investments account for a commanding 79% chunk, amounting to INR 20,238 crore.

State officials attribute this automotive-driven growth to the resurgence of traditional automotive giants venturing into the realm of electric mobility and allied industries. Vishnu Venugopalan, MD & CEO of Guidance Tamil Nadu, emphasized that even their sunrise investments owed their vigor to the foundations of traditional manufacturing.

While the state’s automotive backbone continues to fuel growth, the government is actively exploring fresh opportunities in the automobile sector. S Krishnan, Additional Chief Secretary of Industries, reveals their interest in potential buyers for the now-defunct Ford India factory in Maraimalainagar. Government sources indicate that multiple parties have expressed interest, with negotiations poised to conclude by the end of the fiscal year.

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Tamil Nadu’s strategic focus on automotive excellence is deliberate, with a clear intention to leverage existing auto infrastructure. Krishnan explains that their industrial strategy is comprehensive and open to investments in both their traditional strongholds and the emerging sectors. He mentions that numerous companies hold the belief that internal combustion engine vehicles will continue to exist, leading to incremental investments alongside commitments to electric vehicles. Krishnan cites the significant investments made by Hyundai and Renault Nissan as examples of this approach.

The appeal of Tamil Nadu as an automotive hub transcends competition from other states, such as Maharashtra, Gujarat, and Madhya Pradesh. Vinod Aggarwal, President of the Society of Indian Automobile Manufacturers, lauds Tamil Nadu’s industry-friendly environment, emphasizing the continuous investments by companies like Royal Enfield and Eicher Motors. Eicher Motor’s recent announcement regarding a new 60-acre land parcel at Cheyyar further attests to Tamil Nadu’s allure.

However, the true power of the auto industry lies in its ability to foster a robust ecosystem. V Arun Roy, State MSME Secretary, underscores the role of auto investments in nurturing a network of over 400 vendors, primarily MSMEs. These vendors extend their reach beyond manufacturing, providing crucial facility management services to auto factories, including transportation and logistics. This symbiotic relationship has solidified Tamil Nadu’s MSME health and continues to attract expansion inquiries and new projects, particularly in the evolving electric vehicle (EV) segment.

Despite the sector’s current prosperity, Arun Roy cautions about the impending EV revolution. As EVs reduce the complexity of auto parts, MSMEs must adeptly navigate this transition to remain relevant. Failure to do so could risk stalling what is now a thriving engine of growth in the state.


(This article is assisted by Chat GPT)

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