Chennai, the capital of Tamil Nadu state, is situated on the Coromandel Coast off the Bay of Bengal. The state is estimated to have a population of over 5 million people and is said to be South India's major commercial, cultural, economic and educational centre. Chennai's economy homes an industrial base comprising of automobile, computer, technology, hardware manufacturing and healthcare sectors. Also, a major part of country's automobile industry has ramified in or around the city. No wonder, being India's automobile hub, Chennai has emerged as 'Detroit of India'.
Chennai, being a major IT and automobile hub, has seen tremendous growth in terms of infrastructure and other amenities. This has drawn auto makers to have a keen eye for this city. The auto companies are being drawn towards the city to explore new opportunities that prevail here. A high population, road layouts and other factors combine together to make Chennai ideal for automotive investment and have a strong hold on the Indian auto market.
Also, various factors have been influential to make the city conducive of performing car business. Talking of the customer base of the city, it would be apt to say that a majority of residents here are job oriented. The region is populated by educated and working class people who are earning respectable incomes. A lot of people work in MNCs and opt to choose car as their favourite mode of transport. Thus, the city has slowly emerged as one of the important strategic locations for a number of car companies, including Mahindra & Mahindra.
There are majorly two earning segments of residents in this city. The income slab can be distributed among two groups namely 3-4 lacs and 8-15 lacs. This indicates that the people have a scope of buying their own car and given a choice are likely to go with compact cars and hatchbacks. The idea behind is that these sort of vehicles can be driven around the city corners easily and quickly. As the income earned by residents of Chennai is quite decent, they are quite likely to afford a car to drive back and forth between home and office. Indeed, this has attracted auto makers to grab their market share by establishing their showrooms and facility units to expand customer base in the region.
Seeing the travelling mode used by residents of Chennai, a lot of people prefer to drive a two-wheeler for daily commuting. This seems to be a pretty viable option as a two-wheeler is more likely to pass off a city jam easily than a four-wheeler. The facility of public transport is also used extensively by residents for daily commuting as it is much more economic than driving a self owned two-wheeler or car. However, here should be noted that travelling time via public transport is on the higher side primarily due to repeated halts at respective stops. So, in order to save themselves from the inconvenience of repeated stops, people tend to buy a vehicle for hassle free daily commuting. The idea to purchase a new vehicle does seem to be a good choice to confront emergencies too. For instance, in case of medical emergencies, instead of waiting and calling for cab and wasting time, a car at home would be of immense help. Interestingly, this reason has also lead major auto companies to market their vehicles in the city.
The roads of Chennai are clean and in good condition; and hence, suitable for car driving. Though the traffic is quite high with traffic patterns resembling Mumbai city, there is a good sense of managing traffic among citizens. Also, development of Chennai has taken place in a circular form with a number of highways conducive for driving. This has surely impacted auto manufacturer’s decision to support their campaigns to boost sales figures in their respective car segments.
Sometime back, a paramount turmoil witnessed by the auto sector prevalent in the Chennai city has drawn the attention of several car makers towards its potential opportunities. The Deputy Chief Minister of Tamil Nadu had earlier stated that Chennai marks its way ahead to become the world's largest automobile manufacturing hub with the inception of production facilities by Mahindra & Mahindra, along with an Indonesian group. The total capacity of the facilities is being estimated to be around 2.2 million vehicles per year. This has effectively put the city back as the high attention zone for industry leaders of automotive market in India. Several companies are trying to get their hands on various campaigns to brand their vehicles in the city. This will certainly help to lure domestic buyers and expand its customer base.
Chennai seems to be the 'hot zone' as it is in the priority hit list of many auto companies. For instance, earlier in 2013, the honourable Deputy Chief Minister of Tamil Nadu inaugurated Rs. 2,100 crore Apollo Tyres factory in the city. He also emphasised on the fact that the government is trying to sort out things with a global automobile major that plans to set up a car plant in Chennai. This plant will have a capacity of 300,000 units and need an investment of Rs. 4,000 crore. The research centres of leading auto makers like Daimler, Renault-Nissan, Visteon, Mahindra & Mahindra and Ashok Leyland are also located in the Chennai city. Thus, it would not be wrong to say that Chennai presents a plethora of opportunities for auto manufacturers in India. This is pretty evident from the fact that the city is getting more and more attention by the auto sector. In fact, recent developments in automobile space have made Chennai a favourite place to drive brand value among residents and lure domestic buyers.