Way back in 1995, when General Motors decided to enter India, it located its plant at Halol in Gujarat. But General Motors never made much of an impact on the Indian market and India?s automobile hub was clearly Gurgaon, driven largely by the fact that market-leader Maruti chose to locate there. As happens with big manufacturers, joint venture partner Suzuki?s vendor base gradually set up shop there. Over a period of time, with Maruti also expanding in nearby areas, and with suppliers choosing to expand to meet export demand, Gurgaon was India?s equivalent of Motown.
When Hyundai came into the country, however, it chose to locate in Chennai, its chosen band of ancillary suppliers located there ? even Ford chose to set up base there, enthused by the idea of being close to a port and with the disciplined and skilled work force available.
All of that changed when, thanks to Mamata Banerjee, Ratan Tata was forced to pull out of Singur ? Gujarat chief minister?s ?welcome to Gujarat? SMS, legend has it, did the trick. While Sanand was readying to play host to the Nano and its vendor base, Maruti decided to locate its new plant there as well?though company officials deny it, the spate of labour problems it has had in Haryana have played a role in the decision. So, while the plant is being built for exports right now, it is likely to be expanded to meet the needs of the domestic market as well. Hyundai is also scouting for another location for its second plant, though its not certain if it will zero in on Gujarat. The country?s second-largest two-wheeler manufacturer Bajaj Auto has already expressed its disgust with Maharashtra where the bulk of its manufacturing is located?the company is on record saying Mundra in Gujarat would be its preferred location for setting up a new manufacturing facility. And now, to crown Gujarat?s glory, Ford plans to invest R4,000 crore to set up a 460-acre plant for expanding its export base?last year, the company had announced that it would make India a small car hub. Currently, it only exports Figo from its Tamil Nadu plant. There?s a lesson here for all chief ministers on the importance of, among other things, having a smooth land acquisition policy.