The Hindu Business Line : Full speed ahead

It has been over six months since Forbes magazine listed Pune among the "Emerging Global Cities for 2006". And they have not been proven wrong. Pune is one of the cities to watch for as it records booming growth in almost every sector — from IT and ITES to biotechnology, manufacturing, engineering and design.

The city's thriving automotive profile has received a tremendous boost in 2006. Last month, General Motors India announced a whopping Rs 1,200 crore investment to set up its second plant in India at Talegaon, a few kilometres from Pune's auto hub. The carmaker will initially produce small cars at the facility, which is expected to create about 3,000 new jobs in the region.

Tata Motors is revving up production at its Pune facilities to gain volumes across segments. The company has also announced a joint venture with Italian car manufacturer Fiat SpA to manufacture passenger cars from both players, as well as engines and transmissions, at the latter's Ranjangaon facility. An estimated Rs 2,000 crore will be committed by both companies in the Ranjangaon plant, which is scheduled to manufacture Fiat's Grande Punto; there are plans to manufacture one lakh cars and two lakh transmission boxes.

Bajaj Auto's plant at Chakan

Two-wheeler manufacturer Bajaj Auto has kick-started plans to set up a greenfield facility to manufacture an all-new range of three-wheelers and scooters. The company already has a world-class motorcycle plant in Chakan.

Another auto veteran in the city, Force Motors, earlier called Bajaj Tempo, has trained its sights on global markets with a tie-up with MAN Nutzfahrzeuge AG. The joint venture will soon begin production of high-tonnage MAN trucks and, later, premium buses both for domestic and international markets.

DaimlerChrysler India Ltd, meanwhile, has completed 10 years of operations out of Pune and has in place a component sourcing network in the city. The luxury carmaker recently began assembling its top-notch S-Class out of Pune, announced the launch of its high-tonnage Actros trucks, and eyes a share of the premium bus market as well.

Auto components

The auto components sector, which witnessed a downslide some years ago, is bouncing back with several companies investing in new facilities and products. Several venture capitalists have been attracted to the region's potential to develop into a auto components hub. International Finance Corporation has announced it will invest $7.7 million in RSB transmissions. The India China Pre IPO Equity, a Mauritius-based fund owned by Temasek, has announced $3 million investment in Uma Precision and said it has shortlisted a few other companies in the region for investments.

As the region's auto component manufacturers increasingly supply to global OEMs such as DaimlerChrysler, BMW and General Motors, International Purchase Offices such as Renault-Nissan Purchase Office (RNPO) are narrowing in on these players. Quick to spot emerging global opportunities, players such as the Kinetic group have decided to step on the gas in their components business. Last week Kinetic Communications, the Rs 22-crore auto electrical and electronic manufacturer and engineering design provider, announced a 50:50 joint venture with Bologna-based Ducati-Energia. The JV will produce flywheel magnetos, CDI, ignition systems, and regulators for two-wheelers and three-wheelers;.

The 200-million German component manufacturer, Voss Automotive, recently entered the Indian market through a joint venture with the Pune-based Exotech Group to manufacture specialised, new technology connectors for braking and fluid handling systems in commercial vehicles.

Interestingly, this marks Voss's entry into the Asian market and is a precursor to its entry into the China market. The company's client list includes DaimlerChrysler, MAN, DAF and Volvo among others. It has wholly-owned subsidiaries in eight countries including the UK, Brazil, Spain and Czechoslovakia.

Testing facility

With the auto business clearly set to touch global levels over the next few years, Pune is now home to, among other things, an auto cluster promoted by the Mahratta Chamber of Commerce, Industry and Agriculture (MCCIA), which will help small and medium sector industries upgrade technologies, train manpower and remain globally competitive. Pune will also soon be home to the first research and development, testing and validation centre dedicated to the country's forging industry. The Rs 22-crore project, coming up at MIDC's Chakan industrial estate, is a joint initiative of the Ministry of Heavy Industries and Public Enterprises, the Association of Indian Forging Industries and the Automotive Research Association of India (ARAI), Forging Industry Division, and is expected to be operational by October 2007.

Certification

Another significant milestone is the setting up of a new Emission Certification Laboratory (ECL) at the Automotive Research Association of India's premises here. This is the first facility of the Rs 1,718-crore NATRIP (National Automotive Testing and Research and Development Infrastructure Project). An investment of Rs 11 crore has been sanctioned for ECL, which would help upgrade existing facilities. The ECL will enable certification of mass emission norms as per the Central Motor Vehicles Rules which includes two, three and four-wheelers, engines for light commercial vehicles, tractors and construction equipment.

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