Nano effect: Gujarat attracting big investments since its automobile sector took off in 2009


Ahmedabad: Gujarat’s automobile sector took off in 2009 when Tata Motors set up its Nano manufacturing plant in Sanand, about 50 km from Ahmedabad, and the state has been attracting some big ticket investments from both domestic and international players since then. Now, with the global shift tending towards electric mobility, the Gujarat government seeks to position itself as a leading electric vehicles (EV) manufacturing hub.

To this effect, it signed an MoU with the Tata Group worth Rs 13,000 crore in June this year.

The 10th edition of the Vibrant Gujarat Global Summit will be held from Jan 10 to 12, 2024 in Gandhinagar.

The biennial summit serves as a platform for businesses and governments to explore investment opportunities and establish partnerships.

Experts believe that future-ready infrastructure such as the Dholera Special Investment Region and the Delhi-Mumbai industrial corridor are bound to change the state’s outlook in the auto sector.

Ratan Tata, former chairperson of the Tata Group, recalled in 2011 how the company decided to move out of West Bengal to Gujarat. “We moved our Nano plant from West Bengal where we unfortunately felt we needed to withdraw. We looked for a location where we could have security and the stability that we desired,” Tata had said. Since 2009, the sector has evolved in tandem with the Vibrant Gujarat Global Summit (VGGS), initiated in 2003 by the then chief minister Narendra Modi, with the event becoming a platform to attract investments in the sector.

In 2011, Ford Motors invested Rs 5,000 crore in its Sanand plant. In 2014, Suzuki Motors invested Rs 14,784 crore, creating 9,100 jobs.

In 2022, Tata Motors acquired the Ford plant in Sanand.

In 2017, the MG Motors acquired GM India’s Halol Plant with an initial investment of Rs 2,000 crore and a production capacity of 80,000 units per annum. This is MG’s only manufacturing facility in India.

The success of Gujarat’s auto sector is reflected from the fact that 13 per cent of the state’s total Foreign Direct Investment goes towards this sector, whereas nationally, the auto sector attracts 5 per cent from the country’s overall FDI.

The state’s automotive sector is now valued at USD 3 billion, becoming a significant exporter of automobiles and auto components with over 8 lakh vehicles exported in the fiscal year 2020-21.

Recalling Suzuki Motors’ initial investment, Prime Minister Narendra Modi had said, “Thirteen years ago when Suzuki company came to Gujarat for its manufacturing unit, I said that if our Maruti friends drink the water of Gujarat then they will know well where the perfect model of development is.”

Over the years, the Suzuki group has invested over Rs 28,000 crore in Gujarat.

Maruti Suzuki’s Executive Director Rahul Bharti said the Vibrant Gujarat Global Summit has led to increased investment in the sector.

“Maruti Suzuki decided to invest in 2012 in the state and signed an agreement when Modi was the chief minister. Since then, we are participating in every Vibrant Gujarat summit. It is impressive to watch how over the years this forum has grown exponentially in scale, stature and quantum of investment announced,” Bharti told PTI.

The Mandal-Becharaji Special Investment Region (MBSIR), boasting of USD 3 billion in investments, hosts major players such as Maruti Suzuki and Honda, with a combined annual production capacity of more than 10 lakh vehicles.

It has become a focal point for both automobile and auto component manufacturing industries.

The government has also laid stress on research, development and innovation in the automobile sector, having set up the International Automobile Center of Excellence (iACE) as a joint venture between the Gujarat government and Maruti Suzuki India Limited.

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