TN clears M&M's 1800 cr auto project near Chennai

Tamil Nadu Cabinet on Thursday cleared the proposal of Mahindra & Mahindra to set up an automobile project at Cheyyar near Chennai with
an investment tag of Rs 1800 crore.
The Government has already allotted 200 acres of the total 450 acres required for the project which will have a capacity of 1.5 lakh that will primarily manufacture tractors, SUVs and commercial vehicles besides auto parts. It will have the flexiability to make cars if the company desired so. The investment will also cover a dedicated test track so that the company will have an integrated operation.
Besides this facility, M & M will utilise its existing landbank of 100 odd acres at Mahindra world city at Maraimalainagar to set up one of the world’s largest R & D and vehicle design centres. The MoU for the project is expected to be inked in about two months.
Official sources said the investment will generate direct jobs for 2500 people and several thousand jobs indirectly.
The multiplier effect of the project will mean an additional investment of over Rs 5000 crore, they said.
"By default, it would have gone to Maharashra where M & M has huge land bank. But, it is a hard won project for Tamil Nadu considering the slow down in the global market. It is expected to make it an undisputed leader in the auto space which will be difficult to be challenged by other States", the sources.
It is also a striking victory for the State considering the series of labour unrest and disputes the State had witnessed in the last couple of months.
The sources said the State has already signed MoUs and cleared projects for creating a capacity of 13.5 lakh cars per annum. "Given the global slow down, the M & M investment is a big victory for the State. It will reinforce its leadership position in the auto sector", they said.
M & M clinching the deal in TN also comes close on the heels of its strained relationship with Renault ( Over the failure of Logan car) and the three way venture between Renault-Nissan and Bajaj for the small car project finally taking shape.
M & M’s mega investment near Chennai will also herald the entry of Indian’s numero uno tractor major into the State, which already has the second largest tractor manufacturer, Tafe and Deutsche-Same.
It also signals Mahindra’s big bang return to the Detroit of India after it had exited the JV with Ford Motors which was floated to set up the greenfield project near Chennai.