Designing nuts & bolts and not just fitting them

The city’s formidable reputation as the Detroit of India has helped earn its R&D stripes as well. As top Indian and MNC vehicle manufacturers flocked, the city began to attract R&D investments too. But Chennai’s own ‘eco system’ has also helped attract the R&D pennies to this part of the country. Take local biggie Mahindra & Mahindra which has invested Rs 650 crore to build Mahindra Research Valley at Mahindra World City just outside Chennai. Said Pawan Goenka, director and president of Mahindra & Mahindra’s automotive and farm equipment division: “We were prompted to choose Chennai because of several reasons. At that time we were developing Mahindra World City which, we felt, had the right kind of infrastructure and environment for R&D engineers to work in. Secondly, Tamil Nadu has a good source of knowledge engineers and some really good universities so it’s easier to source good R&D engineers here.”Superior talent at Indian salaries is what helps Chennai hold its own vis-a-vis south Asian rivals like Manila, Bangkok or even Shanghai. And its temperamental power condition doesn’t impact R&D investment because R&D is much less power intensive than manufacturing. Given that Chennai’s Oragadam-Sriperumbudur belt is already an automotive manufacturing hub, the R&D investments are often made in tandem.“The R&D facility of the alliance is integrated with our global centres and we have been very successful with the centre. The efforts of all the researchers has resulted in roll out of KWID with a 98% localisation,” said Sumit Sawhney, CEO Renault India.Experts say Chennai has simply caught the southern end of the auto investment curve in India and many auto companies maintain a northern and a southern R&D centre. “There is only one competition for Chennai which is Pune on automotive R&D though Gujarat is catching up now. The presence of a manufacturing plant and R&D in the same location helps companies to spend less on logististics,” said Kanchana Krishnan, Director, Knight Frank, real estate consultancy.