State Of The Economy 2015

Sputtering to a halt

The gloom in the automotive sector has put brakes on Chakan’s growth and silenced auto ancillaries in Aurangabad

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Published 6 years ago on Mar 30, 2015 9 minutes Read
Photographs by Soumik Kar

On Valentine’s Day this year, the quiet, conservative town of Chakan, about 40-odd kilometres away from neighbouring university hub Pune, was abuzz with activity, with a barrage of vehicles choking key junctions. No, not because local political outfits were protesting the Hallmark-isation of a festival meant to commemorate lovers but because prime minister Modi himself had descended on the town to inaugurate General Electric’s (GE) brand new manufacturing facility there.

Spread over 67 acres and set up with a total investment of ₹1,200 crore, the facility will be utilised to fund GE’s exports. The company plans to dispatch 50% of the unit’s output to its global factories, where its products will be used in the power sector, oil and gas and transportation industries. The unit, which will create 1,500 jobs, will later be utilised to create new-generation aviation engine components and sub-assembly for rail locomotives. 

For Modi, the St Valentine’s Day gala came close on the heels of US president Barack Obama’s second India visit, a diplomatic success. Further, it toed the prime minister’s Make in India line, a call for global players to invest in manufacturing facilities in the country. Ecstatic, Modi assured global investors of the support they needed to manufacture competitive products and invited them to tap into the vast Indian talent pool.

Despite a slump in auto sales, firms are looking forward to an improvement in FY16

This call to action was music to the ears of many in the beleaguered Chakan industrial area. The cluster covers an area of about 3,000 hectare and is home to key automotive OEMs such as utility major Mahindra & Mahindra, Bajaj Auto, Mercedes-Benz and Volkswagen, along with key auto ancillaries such as the Anand Group, Lumax Industries, the Minda Group and Autoline Industries. 

Barring Mercedes-Benz, a key player in the luxury segment, most OEMs have had a

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