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Chennai capable of becoming best automobile hub like the US: Industrial experts

Chennai: In the July-September 2020 quarter, passenger vehicle (PV) sales increased 17.02 per cent to 7,26,232 units from 6,20,620 units in the same period of last fiscal. Two-wheeler sales during the September quarter this fiscal rose marginally to 46,90,565 units as compared with 46,82,571 units in the same period last fiscal, the Society of Indian Automobile Manufacturers (SIAM) said.

However, commercial vehicles sales saw a dip of 20.13 per cent at 1,33,524 units in the quarter under review as compared with 1,67,173 units in July-September 2019. Vehicle sales across categories during the Q2 declined marginally to 55,96,223 units as against 56,51,459 units in the same period of the previous fiscal. “We may get away this year, but next year, hard times are difficult to go by,” VG Ramakrishnan, Managing Partner and MD, Avanteum, said adding that some part of the value chain is showing green shoots. “There is pent up demand and it is not the impact of COVID-19, since those who have retained their jobs during these pandemic times have still the appetite to buy and spend. With the festive season typically expected to show 10 per cent gains more than H1, the enthusiasm in H2 has started to kick-in from this month onwards,” he added.

Even SIAM chief chose to rationalise that the national and global focus is on fighting the coronavirus. “We will have to collaborate and integrate our effort to fight this pandemic. It is the priority right now,” Kenichi Ayukawa, President, SIAM, recently said, responding to a query if SIAM has made another attempt in the hope of convincing the government to cut the GST rate on two-wheelers.

Ramakrishnan also explained how Tamil Nadu as an automobile powerhouse can play a lead role and also use the ‘best talent hotspot’ advantage. Citing the example of the United States, where Massachusetts, Stanford, Harvard were able to create a brand repute, the onus is on the State to build its aura on the reasons that Chennai and such locations in the State can offer a better industrial climate like California, Michigan and Chicago.

It may be noted that Tamil Nadu’s Information Technology prowess has not brought the level of success that its neighbour Bengaluru has managed to achieve. But it is time to change track as efforts to woo investors to incubate in the State must be on the lines of the Silicon Valley. The globe-trotter has studied enough to suggest that Tamil Nadu must focus on moving towards knowledge-centric mobility. For instance, a ‘tablet on wheels’ could be a car of the future, given the paradigm shift that is taking place – technology to electronics driven mobility features and experience. With its inherent engineering capability, the State can take the lead by combining R&D, automobile ecosystem and the educational infrastructure that would give it a clear edge in the electric vehicles space and other futuristic modes of mobility. “Investments have to come in a spate, but the government has to generate demand by providing an enabling environment for market forces to be unleashed. A policy to identify electronics as a focus area that would cover the gamut of mobility solutions – EVs, battery-related technologies. Finally, knowledge platform availability by leveraging the research capabilities and the talent pool like IIT-M and other prestigious institutes to create a start-up ecosystem,” he said. While the guidance from the State has been doing its part, the opportunity to leapfrog to futuristic mobility solutions can be created by focusing on ‘manufacturing start-ups.’ “Tamil Nadu must move beyond states and compete with countries like Vietnam and Indonesia, but the reality is 350 km away. Bengaluru has been able to attract talent in droves besides marquee customers,” the consulting veteran lamented.

Hosur is a classic case that can be turned into an innovation hub for cuttingedge technologies such as Artificial Intelligence and Internet of Things (IOT), besides capitalising on the State’s advantages in the auto and aerospace sectors, that will lay the foundation for manufacturing start-ups. When it comes to lithium and solar panels, the State is better placed than Bengaluru. If Hosur or places like Krishnagiri can be developed into specialised clusters, then it will be a winning formula for Tamil Nadu as its ability to attract R&D talent from the neighbouring region is possible.

“Nurturing an ecosystem is not confined to the creation of buildings, roads and ports but the mindset, the entrepreneurial climate and the social infrastructure are key essentials to be factored too. Policymakers can work to build a cosmopolitan ecosystem that makes it possible for Tamil Nadu to emerge as the first choice for investors in the region,” Ramakrishnan summed up.