Why auto cos are heading to Gujarat, deserting Haryana
alok agarwal
Maruti Suzuki, the country's largest car maker, has one factory at Gurgaon and another at Manesar. Hero MotoCorp, owned by the Munjal family, too, has two factories here. And Honda Motorcycle & Scooters has a unit at Manesar.
It was an inland production hub, which could have made imported parts prohibitively expensive. But, over the years, these companies aggressively localised their component purchases, thereby reducing the dependence on imports.
Since these ventures were primarily meant to service the Indian market, and not to export to distant countries, the huge distance from ports didn't really matter.
As a result, there developed around Gurgaon and Manesar a large army of component makers. As companies such as Maruti Suzuki and Hero gained scale, these suppliers too became bigger and bigger.
As many as 200 large to mid-size component units came up in the region on an investment of $ 3-4 billion. The turnover of the industry is estimated at least $15 billion per annum, and it provided employment to 800,000 people.
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