It’s not just a car!!!

“It’s not just a car, it’s a caaaaar” goes the TV commercial for Nissan Sunny in India.  A drive from Chennai city towards Oragadam the place where this CAAAAR is manufactured in India throws quite a few pleasant surprises for an outsider.  Like getting to see tall residential projects by big Mumbai names like Hiranandanis and still further down of Godrejs in such off city places or stumbling upon a  Korean restaurant or for that matter  a Japanese snack/food/essentials joint in a remote place which has nothing to do with Korea or Japan.  Or is it?  For the locals these are not of any surprise though. We are in India’s car manufacturing hub in Chennai which now houses production facilities of big names like Ford, Hyundai, Renault-Nissan, Benz,..

It’s amazing to see what one car production facility can do to the area, the whole city, the state and its people.  And here we are talking of not just one but quite a few.  Car manufacturing while it generates direct jobs in 1000’s for the skilled factory workers,  engineers, middle level supervisors and managers it generates another few thousand indirect jobs.  Right from security people manning the gates, drivers / assistants/cleaners for the containers which ferry raw material inside and finished cars to the ports, catering people who have the onus of providing food to the workers in thousands, sundry contract labour for carrying out the odd jobs, in-house but outsourced maintenance workers/engineers, tailors who supply uniforms to the 1000’s of workers..,…  Also as Car production happens always in clusters, around it you have the whole campus of ancillary units which produce the various parts and so employ again a few thousands.    I also realized as I saw in Chennai, companies have a separate subsidiary to take care of the spare parts for after-market and its logistics. Then the effect spreads to the ecosystem which throws up things like the eateries – Korean/ Japanese,.. which I mentioned before to take care of the needs of the 100’s of expat Korean/ Japanese/ French/ American/ German staff who sweat it out in Chennai ( literally )as part of the production units of their respective companies.   Smart entrepreneurs start working around the needs of these expats and build highly profitable businesses just ‘catering’ to the needs of the expats may it be groceries/ food items/ their language newspapers/magazines and the works.  ( Heard ‘Saravana Bhavan’ will have a Japanese joint shortly to add to its list- wonder what will be the name though – ‘Sarazu’ may be??? ) While it does all this as far as jobs are concerned, Car production (unlike a chemical factory or pharma factory) doesn’t pollute the environment!

A huge IT park while it generates 1000’s of white collared jobs, it doesn’t do much to elevate the overall economy.  (It does elevate the cost of living as young things try to dispose their sudden rush of income in ingenious ways)  Unlike its southern counterparts AP and Karnataka which pursued an IT led growth and are now stuttering, TN derives its growth from a combination of Manufacturing, IT services and Agriculture.  It’s really unfortunate that though Karnataka houses the production facility of a global car giant like Toyota, it still couldn’t make ‘Bidadi’ where Toyota car is produced in India, a car hub by aggressively pitching for other car manufacturers.  ( Bidadi is now a tourist attraction thanks to Swami Nityananda!!!) It’s another matter that Toyota set up its facility in Bangalore due to reasons relating to history and not economics or geography.  It’s JV partner in India for a long time the Kirloskars were Bangalore based.  In the case of Andhra while Chandrababu Naidu, it’s erstwhile energetic Chief Minister was keen on getting the F1 track in AP and to get many of the IT majors set up base in Hyderabad,was not pursuing (or I don’t recall) any car manufacturer to put up a factory there!

Some may say that it’s not easy to set up car production anywhere and it needs an ecosystem of auto component suppliers, skilled workers, supply of engineers, access to ports, and continuous supply of electricity,…,..  Well it’s a question of whether the egg comes 1st or the chicken!  In today’s world if you order the egg 1st, it comes 1st and if you order the chicken 1st, you get the chicken 1st!!  So it’s up to the state to put the ecosystem in place and pitch for investments or get the investments and build the ecosystem around.  ‘Gurgaon’ before Maruti was well, just a ‘Gaon’!!!

The effect of these in the economy of Tamil Nadu is quite visible.  It is the 2nd largest economy among the states in India and it is the 2nd industrialized state in India.  It also leads the urbanization (44%) in India.

Soon it will be the turn of Gujarat to enjoy the benefits as it starts providing stiff competition to Chennai in becoming the next preferred car manufacturing hub in India.    Thanks to the Tata Nano unit in ‘Sanand,  we hear that already many car manufacturers have planned to put their units around ‘Sanand’. As Chennai battles its woes without power, there are opportunities for other states to get the car manufacturing pie as India with its advantages of low-cost skilled labour, domestic growth, ancillary base,…,… is poised to become one of world’s largest car manufacturing base in the next 2 decades.

While I mentioned about the so many benefits a Car production unit brings to the economy, I must not forget the effect it brings to the pride of people associated with it as well.  Most of the car plants in Chennai while they produce for India are also big time exporters of the finished cars not only to developing countries but also to developed nations.  So much so that while I was in Hyundai the gentleman I met proudly said “if you see an i20 anywhere in the world, it would have rolled out of the Chennai factory!!!”   And somebody else said “Chennai is the Detroit of Asia”!

So Chief Ministers, if you want to pursue hi growth in your state, go after a car manufacturer!

Because “its not just a car, it’s a caaaaaaaaaaar!!!