Auto, IT sectors bullish on Chennai

Confluence of these sectors to offer more business oppurtunities

Growing use of information technology in automotive engineering presents Chennai with a unique opportunity as the city is home to major Indian players in both fields.

The investment in auto component industry in Tamil Nadu was over $ 800 million, said C Chandramouli, Information Technology Secretary of Tamil Nadu. Investment juxtaposed with the use of information technology is meant to bring intelligence into a car and the opportunities are many, he said.

Speakers from the automotive industry and the IT industry discussed the possibility of Chennai emerging as the Detroit of South Asia at a panel discussion organised by Satyam Computer Services to commemorate the fifth anniversary of its partnership with the US automotive major TRW.

Subu D Subramanian, director and senior vice-president, Manufacturing Business Group, Satyam Computer Services, said that a typical auto has 100,000 lines of code. The extent of code in a car is bound to increase, he added.

B Shivkumar, chairman and managing director, Alpump, an auto component company, felt that in about five to six years 35 per cent of cars would be run by electronics.

In the wake of this trend, Satyam has headquarted its automotive vertical in Chennai. The automotive vertical alone makes up about 12 per cent of Satyam's revenue. Satyam's partnership with TRW over a five-year period has resulted in 400 people being assigned to it as compared to about 30 people at the start.

Subramanian says that Indian IT companies confront the challenge of meeting rising expectations from customers. "No longer is straightforward software service provision adequate, but end-to-end solutions are essential," he said. He added that the IT industry needs good domain consultants who can interact with end users.

TRW's partnership with Satyam follows its other partnerships in the auto components industry in Chennai. The company partnered Brakes India and the Rane group in the auto components area.

Speaking about TRW's partnership with Satyam, Joe Drouin, CIO, TRW Automotive, said that it took a lot of effort on both sides to get it going. But five years down the line, it has paid off for TRW because it has given TRW more leeway in allocating spending.

Because of tough conditions in the automotive industry in the last four years, TRW's discretionary spend was limited, said Drouin. The savings that came out of the partnership with Satyam allowed the company to take its discretionary spend further, he added.

With automotive majors such as TRW looking at opportunities to get more out of its partnerships here, industry hands on both sides are upbeat about Chennai's prospects in the field.