August 1, 2012: R Dinesh, Chairman of CII’s Tamil Nadu State Council and joint MD of T V Sundram Iyengar & Sons
The chairman of CII’s Tamil Nadu State Council and joint MD of T V Sundram Iyengar & Sons speaks to Shobha Mathur on the status of the auto industry in South India, efforts to drive new growth and why it can emerge as a global R&D hub.
What is the Confederation of Indian Industry (CII) doing to drive automotive growth in South India?
CII has been working closely with the government of Tamil Nadu to enable the state to continue as a preferred destination for investment in the automotive sector. The state government has identified enablers like skilled manpower, land bank and infrastructure on which it is giving significant focus and attention. Tamil Nadu is still attracting substantial investment in the automotive sector with four major companies having signed MoUs with the state.
Are the logistics and infrastructure issues driving out auto companies from the South?
The South is still the most favoured investment destination of multinational companies due to its inherent strengths. The southern states are making themselves more investment-friendly with more attractive industrial and sectoral policies. They are making substantial investments on the infrastructure front, especially power, roads and ports. CII is also proposing integrated logistics hubs in the southern region to address issues in the infrastructure sector, especially roads and highways.
How is CII tackling the issue of logistics and port infrastructure for facilitating exports since India’s largest car exporter Hyundai and Ford are located in the south? Other OEMs like Renault Nissan are also keen to make India an export hub for sourcing components and cars.
CII’s role is to enable the infrastructure facilities to be built-up and highlight whether there are gaps, especially in planning for the future. South India has two major ports with car export facilities. CII has held detailed discussions with the Shipping Ministry and Chennai Port officials on the need to enhance infrastructure at Chennai Port to facilitate speedy clearance of cargo movement both inward and outward.The Chennai Port has taken up several projects for infrastructure improvement, which we hope will have an early completion. The Chennai Port Trust is planning to set up the dry port at a cost of Rs 100 crore. For this, the Tamil Nadu government has sanctioned 125 acres in Mappedu near Sriperumbudur Special Economic Zone.The ongoing Ennore-Manali Road Improvement Project is expected to ease most of the logistics problems faced by the automotive industry.
What is the current status of Tamil Nadu as an automotive hub?
Chennai is called the Detroit of Asia, thanks to the large number of automobile and auto component manufacturing companies in and around the metropolis. In 2010-11, Chennai accounted for 31 percent of cars and 35 percent of auto components made in the country.Besides the traditional auto hubs in Tamil Nadu, and Maharashtra, there are other states that are emerging as automobile manufacturing hubs. Among them are Gujarat and Uttaranchal (Pantnagar) where Ashok Leyland has set up an integrated trucks unit, and the National Capital Region. Karnataka is also trying to win a share in the auto sector investments.
What is the future roadmap for the auto industry in the southern states?
The Tamil Nadu chief minister’s vision is to make Chennai the world’s largest auto cluster and Tamil Nadu the most developed state in India. In the Tamil Nadu Vision 2023 Document, released by the chief minister, automobile and auto components are among the thrust sectors of focus by the state government. CII will work closely with the state government towards achieving the target set in the TN Vision 2023 document.The future roadmap for the automotive industry is very bright in the South. With a strong presence of automotive, defence and aerospace sectors, Karnataka is also emerging as a preferred destination for investments in these sectors. Investor-friendly policies, availability of skilled labour and entrepreneurial talent would continue to lead south as a global hub for automotive industries.
The Japanese government is believed to be keen that a southern corridor be set for the sector, on the lines of the Delhi-Mumbai Industrial corridor. What are your comments on this?
CII has proposed the setting up of a Southern Industrial Corridor linking the major cities in South India. CII will work with the respective southern state governments in taking this initiative forward. The Industrial Corridor would bring in more investments in the infrastructure and logistics sector and also generate employment opportunities.
Manpower skills shortage continues to be a bugbear for the auto sector’s growth. How does CII view this trend?
CII has been according top priority for skill development initiatives in the region and is working closely with the state government and industry in providing large scale skills training for youth. CII is a state level consultant for the Tamil Nadu Skills Mission and also represented in various Committees on Skills Development in other states. CII proposes to set up 10 Skill Development Centres in Southern States with the support of Industry and Pan IIT Alumni Reach for India to provide skills training on vocational trades.
India is set to become a hub for R&D sourcing going forward. What role will the southern states play in this regard?
India, more specifically, Tamil Nadu, is emerging as a big automotive R&D centre, supported by a large pool of talented workforce. With the presence of global automotive players, Chennai is all set to become a global hub for automotive research. The proposal for setting up the Chennai Aero Park and the Global Automotive Research Centre bears testimony to the leadership of Chennai to emerge as a global R&D hub.
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