CHENNAI: Tamil Nadu has rejected reports that its auto components industry is losing ground to neighbouring Andhra Pradesh, after reports that three component suppliers are setting up plants in Anantapur.
Reacting to three South Korean automotive component manufacturers — Hwashin, Seoyon and Iwamet — choosing to set up a combined Rs 1,614 crore investment cluster, an industries department official said it was being “presented and read out of context”, and pointed out that the move reflects how automotive supply chains work rather than any shift in the state’s appeal. Hwashin and Seoyon already operate units in Sriperumbudur and Krishnagiri while Iwamet, a key global supplier of precision automotive parts, has a registered entity in Sriperumbudur.
“Component suppliers are located close to the OEMs they serve,” the department said. The Anantapur investments follow an anchor manufacturer’s decision to expand capacity there, which “started operations long before the current (TN) government”. This comes amid Kia India’s reported expansion at its Anantapur plant, which couldn’t be confirmed.
The government was in discussions with these companies to persuade them to invest in Tamil Nadu and serve Kia from here. “We knew the odds were stacked against us, as the companies already had a presence near Kia, but we made every effort to convince them. We did not succeed, and that is true. But these investments were never ours to begin with. We nevertheless pursued them.”
“When we signed MoUs with Motive Link, Inzi Controls, Woo-young and DYC1, we pulled off an investment coup against Andhra Pradesh. Despite Kia being their principal buyer, these companies chose Tamil Nadu. That should demonstrate the extent of our efforts and the lengths we go to in persuading investors to set up operations here,” the official said.
The industries department said the episode “does not reflect any change in Tamil Nadu’s competitiveness” and that it is unfair to expect Tamil Nadu to secure 100% of the investments coming into India. “We strive to attract every possible investment, but inevitably, we win some and lose some,” he said.
It is learnt that the state is in “active dialogue with global and domestic manufacturers on new investments”, which would be announced “in due course”.
TN hosts one of India’s largest automotive clusters, with tier-1 and tier-2 suppliers concentrated around Chennai, Sriperumbudur, Hosur and Coimbatore. “The state automotive ecosystem was built over three decades, and companies that invest here stay and expand,” the official added.
Sources from the industries minister’s office accused the DMK of double standards, playing down the loss of high-profile projects, including Amara Raja’s Rs 9,500 crore investment, the Hwaseung footwear plant, Foxconn expansion worth Rs 15,000 crore, Royal Enfield, Hindalco, Premier Energies and a Google data centre among projects, during the DMK regime.
