Dr Neeraj Mittal (IAS), MD and CEO, Guidance TN (nodal agency for Investment promotion and facilitation) shares how Tamil Nadu plans to sustain its position as an investment destination for the traditional auto industry, and also grow to be a major EV industry hub too.
How much investment has come into Tamil Nadu during the first quarter of the current financial year? What is the share of auto industry players in it?
Tamil Nadu’s industry friendly policies, geographical advantage and focussed effort of government through high-powered committee headed by the chief minister and investment task force has helped us to sign 41 Memorandums of Understanding (MoUs) even during the pandemic lockdown (April-July 2020) with an investment potential of Rs 30,664 crore, which will generate employment opportunity for 67,212 people. As per a survey conducted by Projects Today, Tamil Nadu has attracted more investments than any other state in the country during the first quarter of 2020-21. Approximately Rs 3,500 crore worth of investments is in the auto sector. Auto companies such as Daimler, BYD and Mando have signed MoUs for their expansion in the state.
Chennai is also known as the ‘Detroit of Asia’. How do investments from the automotive industry here compare to other Indian states?
Chennai is called the ‘Detroit of Asia’ due its strategic location advantage, rich automobile ecosystem, infrastructure support and high-quality workforce. In addition, Tamil Nadu government’s industry friendly policies and a vibrant state demand make it an attractive destination for investors. We have an annual installed capacity of 1.71 million passenger vehicles and 4.82 million two- wheelers. It is home to major OEMs such as Hyundai, TVS, BMW, Ashok Leyland, Renault Nissan, Daimler, Royal Enfield and TAFE. Chennai is the largest tyre manufacturing hub in the country with manufacturing presence of various brands such as Ceat, MRF, Bridgestone, Michelin, Apollo Tyres and ATG. Two Ro-Ro berths are exclusively dedicated for auto exports at Kamarajar Port in Ennore, Chennai to reduce the turnaround time. Over 1,300 factories are present in Tamil Nadu for producing motor vehicles, trailers and
How many automobile manufacturing companies and component manufacturers are there in Tamil Nadu currently?
Currently, we have over 20 OEMs covering all auto segments and over 350 auto component players (Tier 1 to Tier 3) and over 4,000 SMEs under Tier 4 in the state.
What are the plans of the Tamil Nadu government to maintain, and maybe grow, its status as an investment destination for the automotive industry?
We are in the process of revising the new industrial policy based on benchmarking industry expectations and global trends. I believe the new policy will be able to attract new wave of investments into the State. One of our key priorities will be to focus on developing the entire automotive ecosystem in Tamil Nadu. Special emphasis is being laid on skill and talent development to ensure abundant availability of productive workforce. This can provide a sustained advantage for automotive investors in the state.
The state government announced an EV policy in September 2019. What are the key steps being planned to build Tamil Nadu also as an EV industry hub?
Tamil Nadu’s comprehensive EV policy was launched last year. It was well appreciated by the industry. It has incentives and subsidies for both supply side and demand side. The policy covers EV ecosystem with incentives to EV charging station developers. Key areas for investment include e-vehicles, battery and cell manufacturing, electric motors, EV powertrains, charging infrastructure and battery management systems.
Does the government have a vision to build a global EV hub? If yes, what are the key initiatives to attract investments from EV industry players? Which are the key EV players from India and overseas that have invested, or likely to invest in the state?
Yes, EV is the next big thing in the auto sector. The vision of the Tamil Nadu government is to attract
Rs 50,000 crore of investment to create a comprehensive EV ecosystem in the state. We believe it will generate employment for up to 150,000 persons. We want Tamil Nadu to be a first-mover as an EV manufacturing hub for the world. We already have various EV players who have evinced interest in investing in the state, namely Ather Energy, MAHLE Electric and YoungHwa. We have several existing players like Ashok Leyland, TVS, Hyundai and Srivaru Motors who have ventured into the EV space. Companies such as BYD have recently signed MoUs to develop the EV ecosystem in the state.
What is the share of automobiles and components produced in Tamil Nadu, in the overall Indian output?
Tamil Nadu accounts for 35 percent of India’s auto component production. Thirty percent of India’s four-wheeler manufacturing is from Tamil Nadu.
Is the Tamil Nadu government introducing new initiatives for the skill development, or facilitating employment of the youth?
Recently, TNSDC (Tamil Nadu Skill Development Corporation) carried out a detailed skill gap study in the state. TNSDC is working on the recommendations to create a large pool of skilled youth which can then be employed in various industries. As per a TNSDC survey, the state has a higher labour force participation rate of 57 percent than the national average of 50 percent owing to its larger share of working age population.
Andhra Pradesh and Gujarat are emerging as attractive investment destinations for the auto industry. How does the Tamil Nadu government plan to stay ahead?
Tamil Nadu offers a rich ecosystem, last-mile connectivity, port logistics and supply of high-quality workforce to its investors. We have taken various initiatives to enhance investor experiences, like Bizbuddy portal, land information portal, single window facilitation among others that differentiate us. We are also mapping private land parcels in GIS (Geographic Information System) and have created large industrial parks across the state under our corridor program. We believe this will keep us as the numero uno state for investors.
(This interview was first published in the August 1 issue - South India Special)