BMW decides to locate its assembly unit near Chennai

CHENNAI: BMWs decision to locate its assembly unit near Chennai has reconfirmed Tamil Nadu and its capital as the automobile hub of the country.

When the German automobile giant sets up its plant here, it will be the third passenger car unit in the environs of Chennai, after Hyundai and Ford. There are other giants such as Ashok Leyland and Hindustan Motors who have their units in the State, giving it a clear lead in the automotive sector and the automotive components segment.

Official sources say it was the “swift processing” by the Government and its agencies, soon after a BMW delegation expressed interest in locating the plant here, that clinched the deal. Tamil Nadu enjoys the reputation of being the “natural choice” for automobile and components manufacture.

The presence of leading component manufacturers and their ability to conform to international standards has always helped the State bag new projects.

Better infrastructure

Industry sources say the “relatively better infrastructure in the State,” availability of efficient air and sea ports, international connectivity from the airport and abundant professional talent in the market have been contributing factors in enhancing Tamil Nadu’s status as a “preferred investment destination.”

The sources feel that though BMW has provided for a five-year period to become operational in the Memorandum of Understanding signed on Thursday, an assembly plant can be set up within two years.

Based on the market conditions and export potential, the auto major may decide to upgrade the plant into a manufacturing base in due course – the way it has done in South Africa.

According to these sources, Volkswagen has still not decided on a location for its proposed production facility in India.

“Our information is that Visakhapatnam may not be their final choice. With a new team from the automobile company now in charge, it is quite possible they will look at sites in Tamil Nadu and Karnataka before making up their mind,” says a senior in the automotive components manufacturers association.