Auto industry in Chennai reels under rains of the century

Following widespread flooding due to the heaviest rainfall that has lashed Chennai, losses to overall industry are estimated to be around Rs 15,000 crore. Of this, the automobile and automotive components industry, which is one of the powerhouses of South India’s growth story, will bear the brunt of the climatic assault which has brought Tamil Nadu and its capital Chennai to a standstill.

While there was some respite from the incessant rainfall on Thursday, many locations in Chennai and its surrounding areas, which house large manufacturing plants of a host of vehicle manufacturers including BMW India (Chengalpet), Force Motors, Ford India (Chengalpattu), HM (Tiruvallur), Hyundai Motor India (Sriperumbudur), Nissan Motor India (Oragadam), Renault India (Oragadam), Ashok Leyland (Ennore), Daimler India Commercial Vehicles (Oragadam), Royal Enfield and TVS Motor Co, continue to be flooded. A number of automakers including Royal Enfield, Ashok Leyland, Renault India, Nissan Motor India have halted production operations for the time being. Most automakers have either kept their plants shut till Saturday or are working with a skeleton staff.

Royal Enfield issued a statement which said: “The unprecedented rainfall in Chennai has severely affected the city, including our employees, our manufacturing facilities and offices. The floods caused by the rain have also impacted logistics and our supply-chain, resulting in disruption of our production. As a consequence, we have shut down our offices in the city and our plants in Thiruvottiyur and Oragadam since December 1. Due to the rains, the company had in November lost production of 4,000 motorcycles. We are working to ensure that all our employees are safe. We are monitoring the situation closely and hoping for normalcy to return soon.”

Chennai's component supply chain likely to be impacted
Tamil Nadu and Chennai are also home to a flourishing auto component industry, most of whom will also be affected, particularly small and medium enterprises. Considering that a number of Chennai-based automotive component suppliers will keep their plants shut for the next few days or so till things normalise, it is likely that the component supply chain from South India to local automakers as well as those in other parts of the country will be impacted.

Also read: Hyundai Motor India lends rain-hit Chennai a helping hand