Tata Motors to invest Rs 9,000 cr for a new car-making unit in Tamil Nadu

This will be its 2nd plant in South India. The announcement comes as a boost to Tamil Nadu, which is already known as the ‘Detroit’ of India for the state being home to automobile majors like Hyundai, Ashok Leyland, BMW, Renault-Nissan, and Yamaha.

Chennai: Home-grown automobile major Tata Motors on Wednesday announced that it will explore setting up of a “cutting-edge” vehicle manufacturing unit in Ranipet district in Tamil Nadu with an investment of Rs 9,000 crore, its second South India factory after Dharwad in Karnataka.

A Memorandum of Understanding (MoU) was signed between V Vishnu, Managing Director & CEO, Guidance and P B Balaji, Group CFO, Tata Motors, in the presence of Chief Minister M K Stalin, on Wednesday.

“The factory which will manufacture passenger vehicles will come up at state-owned SIPCOT industrial estate in Panapakkam in Ranipet district,” a source in the know told DH. Another source said the new facility in Tamil Nadu is likely to roll out both conventional and electric vehicles.

Tata Motors, in a press statement said, the investment of Rs 9,000 crores will be made over a period of five years. “Following the signing of this MoU, teams from Guidance, Tamil Nadu’s nodal agency for investment promotion and facilitation and Tata Motors Group will work together to take this opportunity forward,” the automotive major added.

Tata Motors, whose fresh investment will bring up to 5,000 direct and indirect jobs, becomes the second automobile original equipment manufacturer (OEM) to choose Tamil Nadu in just about two months after VinFast, Vietnamese electric vehicle manufacturer, which is building its first India factory in the port city of Thoothukudi in southern Tamil Nadu.

The announcement comes as a boost to Tamil Nadu, which is already known as the ‘Detroit’ of India for the state being home to automobile majors like Hyundai, Ashok Leyland, BMW, Renault-Nissan, and Yamaha.

“With this investment, Tamil Nadu further solidifies its position as the unrivalled automobile capital of India, reminiscent of the transformative impact of Hyundai’s investment during Kalaignar’s (M Karunanidhi’s) tenure,” Stalin said.

The announcement by Tata Motors comes three years after the company chose to buy the Ford’s Sanand plant over the Maraimalainagar plant near Chennai following the American automotive player’s decision to exit the Indian market in September 2021. Tatas decided to buy the Sanand plant as only a wall separated the company’s factory with the one that was owned by Ford there. The Maraimalai Nagar plant continues to be dormant.

A senior government official said Tata Motors choosing Tamil Nadu for its new manufacturing facility is a clear signal that the state continues to be the leading destination for investments in the automobile sector.

“After Renault-Nissan in 2008, the state didn’t have any major OEM in the sector investing. But in the past two months, we have got two big names,” the official added.

The announcement also comes two months after Netherlands-headquartered automotive conglomerate, Stellantis Group, and Royal Enfield pledged to invest Rs 2,000 crore and Rs 3,000 crore, respectively. While Stellatis will set up an internal combustion engine (ICE) and electric car manufacturing unit, Royal Enfield will expand its existing facility.

State Industries Minister T R B Raaja said the MoU between Tata Motors and Tamil Nadu government is to establish a cutting-edge vehicle manufacturing facility. “We’re not just building factories; we’re engineering dreams and accelerating towards a brighter, more prosperous future,” Raaja added.