Jayalalithaa dead: How the Tamil Nadu CM strove to make Chennai the 'Detroit of Asia'

For the automobile industry, AIADMK leader and six-time Tamil Nadu chief minister J Jayalalithaa’s (Jayalalitha) death is indeed a big loss. She has been in the forefront of attracting auto giants into the state and developing Chennai as the ‘Detroit of Asia’ over the last more than 20 years.

The state’s impressive industrial journey got a major impetus with US car major Ford’s investment in Chennai in 1995. That was one of the key investments the country received after the economic liberalisation started in 1991.

When the then government under Jayalalithaa clinched the deal in 1995, it was considered a coup of sorts. The company set up its manufacturing facility as a 50:50 joint venture with Mahindra & Mahindra.

Jayalalithaa had gone all out in wooing the company to invest in her state, facing stiff competition from other states.

According to media reports, the government had given away Chennai Metropolitan Development Authority’s land for setting up the facility. Since then, Ford has made cumulative investments of $2 billion in India and exports many of its key models such as EcoSport made at the Chennai unit.

“Chennai is Ford Motor company’s home away from home (after the United States),” Ford Executive Chairman Bill Ford had said last month announcing a Rs 1,300 crore investment in Chennai.

“Saddened by Jayalalithaaji’s demise. Got to know her when she inaugurated Mahindra Ford’s Chennai plant&then Mahindra World City,” Anannd Mahindra, executive chairman of the Mahindra group, said in a tweet reacting to the news on Monday.

Ford’s investment served as a launching pad for other auto companies that flocked to the state cashing in on the industry-friendly policies of the government. According to reports, as many as seven of the top 20 global majors have made investments in Tamil Nadu. The companies which have facilities in Chennai include Hyundai, BMW, and Mitsubishi.

The impetus given to automobile manufacturing also boosted the ancillary sector investments too.

In February 2014, the AIADMK government unveiled an automobile policy in a bid to make Chennai one of the top five global auto clusters.

“Recognising the importance of automobile and auto-components sector to State, my government has brought out a separate Tamil Nadu Automobile and Autocomponent Policy 2014,” Jayalalithaa said at the function to mark the formal launch of the policy, along with Tamil Nadu Vision 2023 document second phase.

As Jayalalithaa returned to power in May 2016, proving anti-incumbency could not dent her popularity, the auto sector cheered as it meant policy consistency.

“Consistency in policy making and furtherance of the already set mission is the biggest benefit…. Our experience with Tamil Nadu has been very positive and encouraging,” Rakesh Srivastava, senior vice-president (sales and marketing), Hyundai Motor India, was quoted as saying in a report in The Economic Times.

Jayalalithaa’s death leaves a big void in Tamil Nadu’s political scene and there could be political uncertainty as she has not built up a strong second-rung leadership. If this plays out as anticipated, it may not augur well for the sector.