Entry of Auto Majors in Gujarat: Opportunities

By Manish Manghnani

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Introduction

• 2001 – Mr. Narendra Modi in power

• Era of change and development

• Gujarat becoming an automobile hub

• Friendly investment policies and other factors

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GUJARAT: An emerging Auto-Hub.

1991

•Apollo Tyres was the first company to enter Gujarat.

•Apollo's Gujarat plant is at Limda

1996

•General Motors started its plant at Halol with an investment of Rs 2,000 crore.

2002-

•Heavy commercial vehicle manufacturer Asia Motor Works set up its Rs 1,400 crore facility in Bhuj

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2003

•Vibrant Gujarat summit has played a very instrumental role in developing the industrial base of the state.

2006

•The Tata Nano Singur Conflict

2008

•Turning point for Gujarat auto industry.

•Gujarat welcomed the Tata Motors

2012

•Other Auto Majors like Ford India, Peugeot Maruti Suzuki have also acquired Land in Sanand.

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Reasons for preferring Gujarat• Abnormal Concession

• Tax Benefit• Doled out concessions

• Business environment

• Better labor-industry relations• Infrastructure

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• Port connectivity

• Readily available land

• Availability of power

• Pro-industry government

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Opportunity • Pro-business environment• Excellent infrastructure• Facilitation of land acquisition• Well developed ports (Mundra ,Kandla)• The availability of skilled workforce• Stronger political environment • Electricity• Location between Delhi and Mumbai

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Players

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TATA Nano • 2008, plant shifted

• 725 acres

• Generates over 20,000 direct and indirect jobs

• Friendly approach of the farmers

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Hyundai

• Diesel engine manufacturing plant

• Invest 4,000 crore

• Officials visited site at Dholera

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Maruti Suzuki• Maruti Suzuki India is in talks with the Gujarat government.

• Maruti along with vendors, could invest up to Rs 18,000 crore , producing 20 lakh units.

• Maruti Suzuki India (MSI) said the new 700-acre plant near Mehsana will be set up in a phased manner with an initial investment of Rs 4,000 crore by 2015-16.

• The plant in Gujarat will generate direct employment for over 2,000 people.

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Ford

• Applied for 500 acres of land

• Neighbor of TATA Motors in Sanand

• Ford’s second plant in India

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Why Ford selected Gujarat• location as it offers ports for possible exports to western

markets.

• Cost and logistics considerations, business environment and the State Government's “transparent and competitive” offers.

• “We took a lot of time and saw activity to zero in on Gujarat.”

(By Mr Michael Boneham, President and Managing Director, Ford India)

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PSA Peugeot Citroen• PSA PEUGEOT CITROEN returned to India

• Peugeot’s Sanand plant which will be 17th globally

• It plans to invest nearly Rs 4,000 crore in the facility and hopes to start production by 2014

• It will provide direct employment to 5,000 people and indirect employment to another 25,000 persons

• Construction work near Sanand is scheduled to begin this year end and the project will be commissioned by 2014

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Growth in Rajkot• Rajkot is a hub for the auto parts ancillary units

• 70 per cent share in the Indian auto parts industry

• Registered a 15-20 per cent growth annually

• 500 manufacturers of auto components

• Total turnover is INR 1500 crore

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Sanand • Sets opportunity for Gujarat to be an auto hub

• 2008: Tata Nano plant

• July 28: Ford India announced its second Indian facility on 480 acres at Sanand.

• September two: Peugeot, too, announced its re-entry into India via Sanand, from 584 acres of land.

• They are investing Rs 4,000 crore each

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Opportunities due to Sanand• Sanand is a part of special investment region, which permits firms

investing there to avail various fiscal and non-fiscal benefits, reducing project costs, including time for completing the project cycle.

• New jobs in automobile hub sector.

• Economic and employment opportunities.

• Avail of various tax incentives.

• Easy availability of land

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Benefit to Indian Economy1. Mother industry for every direct job in the OE & minimum 5-7 indirect jobs

are created.

2. Importance of transport equipment.

3. Providing job opportunities for the design, hardware and software engineers.

4. Help India to develop a niche position globally and diversify its export basket.

5. Healthy competition among auto hubs.

6. It would assist India in progressing towards the goal of increasing the share of manufacturing in GDP from 16% in 2010 to 25% by 2022.

Thank you

By Manish Manghnani