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Chapter No 4 SOCIO-ECONOMIC STRUCTURE OF DISTRICT

Chapter Page Title No. No.

4 SOCIO-ECONOMIC STRUCTURE OF 119-147 4.1 Overview 119

4.2 Geographical features of Pune District 120

4.3 Social and demographic pattern of Pune District 121

4.3.1 Population 121

4.3.2 Administrative Set Up 124

4.4 Economic context of Pune District 125

4.4.1 Industrial profile 126

4.4.2 Economic contribution 127

4.4.3 Industrial Scenario 129

4.5 Automobile Industry with reference to Pune district 133

4.6 References 147

Chapter No 4

SOCIO-ECONOMIC STRUCTURE OF PUNE DISTRICT

This chapter examines the context and background of Pune district with reference to its social and economic structure. The researcher tries to showcase the factors such as geography, social & demographics impacting growth of automobile industry. This establishes the reasons for selection of Pune district for studying, examining and validating the present hypothesis. Also, the basis for selection of the automobile industry is discussed.

4.1 Overview

In recent decades, Pune has emerged in the academic and industrial center. At the same time, the Pune district is blessed with a mild and temperate climate, and is currently a privileged choice for people from all over as a preferred destination of choice in . It is a dynamic place and represents a progressive region with a good mix of urban, cosmopolitan and rural culture.

The bustling city of Pune is one of the fastest growing industrial centers in . Pune attracts students and professionals from all over India and abroad, and is one of the major industrial cities in India. Pune has experienced considerable population growth over the past 15 years due to the general evolution of various industries and information technologies. With a total population of more than 9.2 million, urban buildup of Pune is one of the most dynamic regions in Maharashtra. The conglomeration of Pune which includes Talegaon Pune, -, Kalyaninagar and has grown considerably in the last 15 years. A small figure of 4,485,000 in 2005, urban accumulation increased to more than 9.2 million after 2011. Population migration is one of the main reasons for this speedy increase of the population of Pune. In addition, outstanding growth in the software and education industry has created more job opportunities for the working class. People from all over India have stabilized in Pune, which offers career and employment opportunities. Many global students prefer to study in Pune, which offers some of the finest research institutes, educational institutions and

119 centers for information technology (IT). Pune is considered the of India - with its many premier educational institutions and research institutes and many other sports, yoga, Ayurveda, culture and social services institutions.

The city of Pune is the headquarter of the district. In the latest update, the district's total population was 9,426,959, making it the fourth most populous neighborhood in India. The urban population comprises 58.08% of the total population. The current population of the urban Pune region is more than 5 million.

4.2 Geographical features

Geographically, Pune District is in the western region in Maharashtra in India. It is flanked by District to the northwest, to the west, District to the south, District to the southeast, and District to the north and northeast. The total geographical area of Pune district is 15642 sq. kms. This is around 5 per cent of the total area of Maharashtra state.

Pune district falls in the or Sahyadri mountain range and it spreads on to the on the east. Pune is located on the sheltered side of the Western Ghats. Pune is at an altitude of 559m. (1863 ft.). Pune district is situated between 17.5° to 19.2° North and 73.2° to 75.1° East. Average rainfall in the district is 600 to 700 mm. This is typically through the months from July – October. Modest temperatures are mostly experienced here. The rainfall is volatile in harmony with the Indian monsoon. Summers here commence from early March to July. Summers are dry and hot. The temperature varies from 20 °C to 38 °C, however at the topmost they may touch 40 °C.

Extreme rainfall is experienced from June to September every year. Due to its geographical location, the climate of the city is cool and pleasing during the entire year. The natural attractiveness of the city has given it claim to the title of the .

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4.3 Social and demographic pattern of Pune district

4.3.1 Population Pune Population 2011

As per provisional reports of Census India, population of Pune in 2011 is 9,429,408; of which male and female are 4,924,105and 4,505,303 respectively. Although Pune city has population of 9,429,408; its urban / metropolitan population is 5,049,968 of which 2,659,484 are males and 2,390,484 are females.

Pune Sex Ratio 2011

The sex ratio of Pune city is 945 per 1000 males. Child sex ratio of girls is 896 per 1000 boys.

Pune Child Population 2011

It is clear from the following table no 4.3.1.1, total children (0-6) in Pune city are 1,104,959 as per figure from Census India report on 2011. There were 586,665 boys while 518,294 are girls. The child forms 11.72 % of total population of Pune City.

Table No. 4.3.1.1

Pune Child Population 2011

Pune City Total Male Female Population 9,429,408 4,924,105 4,505,303 Literates 7,171,723 3,940,210 3,231,513 Children (0-6) 1,104,959 586,665 518,294 Average Literacy (%) 86.15 90.84 81.05 Sex ratio 915

Child Sex ratio 883

Pune city comes under Pune Metropolitan area. It can be clearly observed from the following table no 4.3.1.2, child population for the metropolitan region of Pune.

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Table No. 4.3.1.2

Pune Metropolitan Child Population 2011

Pune Metropolitan Total Male Female Population 5,049,968 2,659,484 2,390,484 Literates 4,103,766 2,243,534 1,860,232 Children (0-6) 561,004 297,943 263,061 Average Literacy (%) 91.42 95.00 87.44 Sex ratio 899

Child Sex ratio 883

Pune metropolitan area includes Talegaon, -Road, Dehu, Pimpri-Chinchwad, Shivajinagar& Pune city.

Demographics

Population

Pune is one of the maximum crowded districts in Maharashtra and ranks third in the state in terms of population. As per 2011 census, Pune has a population of more than 9.2mn and population density of 603 people per sq km. The decadal population growth rate from 2001 to 2011 was reported at 30.34% can be clearly observed in following table no 4.3.1.3.

Table No. 4.3.1.3

Pune Population Literacy rate 2011

Male Female Total/Overall Population in million (2011) 4.9 4.5 9.4 Literacy rate (%) 95.00 87.44 91.42 *Source: Census 2011

The literacy rate is higher among the male population of the city. During 2011, the male literacy rate stood at 92.7% and female literacy rate stood at 81.1%.

Majority of population in Pune is constituted of Hindu religion followers. Approximately 71% of total population in Pune is Hindus. Muslims, Buddhist, Jains, Christian and others contribute to the rest percentage of population in the city.

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Pune has witnessed a huge development in its population due to hasty urbanization. Population increase in the city has climbed new heights as there are more people traveling towards Pune for job, education and other reasons. According to recent estimates, growth of population in Pune is 12% every year. Following table no 4.3.1.4 shows the Pune district population comparison.

Table No. 4.3.1.4

Pune Population Comparison 2011

Indicator City (Municipal State(Urban) India(Urban) Corporation) Total Population 3,124,458.00 50,818,259.00 377,106,125.00 Total Population of UA (if) 5,057,709.00 Share of ULB population in 54.33 District Urban population (%) Population Growth Rate (AEGR) 2.08 2.12 2.76 2001-11 Area (sq. km)* 276.40 Share of ULB area in district 1.77 (%)* Density of population (person per 11,304.00 sq. km)* Literacy Rate (%) 89.56 88.69 84.11 Schedule Caste (%) 13.42 11.38 12.60 Schedule Tribes (%) 1.09 2.96 2.77 Youth, 15 - 24 Years (%) 18.51 19.63 19.68 Slum Population (%) 22.10 2.02 17.36 Working Age Group, 15-59 years 67.24 66.68 65.27 (%) Source: Census of India, 2011 *District Census Handbook, Census of India, 2011 *The ULB is spread in more than one district

The vision city of Pune or Poona has revealed most important signs of growth in the last 20 years. The city has become a main industrial center of India therefore appealing skilled workers from all over the nation. Large scale development of industries and rapid urbanization are few of the aspects accountable for this enormous growth in its population.

Well-thought-out as a cultural capital of Maharashtra, Pune has people from all corners of India together with a substantial population from the states of North India, Karnataka,

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Gujarat among others. Along with Marathi, the local language, English and are also widely spoken.

4.3.2 Administrative Set Up

Pune district has 14 talukas viz. Pune, Haveli, khed, Ambegon, , Shirur, , , , Purandhar, , Velhe, and . At the district level, collector is the Administrative Chief and at tehsil level, Tehsildars are looking after the administration as per Collector’s instructions. For rural development, Chief Executive Officer of Zilla Parishad and at block level, Block Development Officers are in-charge of the administration. Municipal Councils are responsible for urban development of all the tehsils. There are 13 Panchayat Samities, 11 Nagar Parishads and 2 Municipal Corporations, this can be clearly observed in following table no 4.3.2.1.

Table No. 4.3.2.1

Administrative Set Up

Sr. No. Particulars Unit Pune 1 Tehsils Nos 14 2 Panchayat Samities Nos 13 34 3 Cities Nos (25 urban areas 9 census town) 4 Villages Nos 1866 5 Area Sq. Km 15643 6 Mahanagar Palika Nos 2 7 Nagar Parishad Nos 11 8 Gram Panchayati Nos 1407 9 Board Nos 3

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4.4 Economic context of Pune district

Pune district has two municipal corporations, namely Pune Municipal Corporation (PMC) and Pimpri-Chinchwad Municipal Corporation (PCMC). It is an industrial center as well as agriculture based economy. It is one of the IT destinations of India. There are numerous automobile manufacturing business units in the Pune District.

Pimpri-Chinchwad is located at the West of Pune city, touching the Pune- National highway. The corporation covers the area of Talegaon, , Akurdi, Pimpri, Chinchwad and . The said area is developed by MIDC as an industrial zone.

Pune has a flourishing economy. There are two industrial parks in the peripheries of Pune developed by the Maharashtra Industrial Development Corporation (MIDC). This is besides the already bustling industrial hub of Pimpri-Chinchwad. A large number of Indian industry majors and MNC's have set up base in Pune and its suburbs. These include companies like , TELCO, Philips India, Kirloskar Cummins, Kalyani Sharp, , Mahindra & Mahindra, Mercedes Benz India Ltd, Weikfield India, Serum India, Duro Shocks, Kinetic Honda, Whirlpool, LG, Frito Lay, Coca Cola etc. Suburbs of Pune like Baramati, Khed, Mundhwa, Loni, Yerwada, Talegaon, , , Wadgaon etc. account for a majority of Pune's agricultural produce, though Pune is not an agricultural city. Pune has also arisen as a software industry hub. Many of the leading Indian software companies have their presence in Pune. These include companies like , Tech Mahindra, Wipro, Patni, Persistent Systems, Geometric Software Solutions Private Limited and others besides many global players. The BPO industry is also flourishing with many foremost Indian names and MNC's recording their existence in Pune.

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4.4.1 Industrial Profile

The industrial profile of Pune district encompasses of Large companies, mid-scale companies, MSMEs, SMEs and multinational companies, this can be clearly seen in following table no 4.4.1.1. & category wise breakup can be observed in table no 4.4.1.2.

Table No. 4.4.1.1

Details of Co-operative Industrial Area

No. of Co- No. of No. of operative Total Area No. of plots District plots working Industrial (Hectares) carved out allotted Industries Estate Pune 06 154.37 610 598 279

Table No. 4.4.1.2

Category wise breakup of Industrial Area

Sr. Category Cumulative since inception up to the end of reporting month JULY-2012 No Investment (P&M) Number of enterprises Employment generation (Rs. In lakh) Servic Mfg. Service Total Mfg. Total Mfg. Service Total e 1 Micro 19907 1856 21763 78880 8389 87269 104977 6541 111518 2 Small 5045 773 5818 40322 8317 48639 210432 16012 226444 3 Medium 84 18 102 10010 2180 12190 57587 5686 63273 Total 25036 2647 27683 129212 18886 148098 372996 28239 401235 Large scale Projects 4 639 0 639 91666 0 91666 9605 0 9605 (Production Commenced)

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4.4.2 Economic contribution

During FY12, Pune district contributed around 11.5% to GSDP and around 11.3% to NSDP of the state. During FY12, Pune district contributed 50.5% to the total GDDP (at current prices) of (includes Pune district, , district, , and district). During FY12, the Gross District Domestic Product (GDDP) (at current prices) of Pune district stood at 1,376.5 bn, compared to 1,175.1 bn in the previous period, registering YoY growth of around 17.1% during this period, can be clearly seen in following table no 4.4.2.1. The NDDP of Pune reported a YoY growth of 17.4%, while the per capita Net District Domestic Product (NDDP) reported YoY growth of 15.5%. Per capita NDDP of Pune was around 47.4% higher than the state per capita NDP, can be clearly observed in following table nos 4.4.2.2 & 4.4.2.3.

Table No. 4.4.2.1 Gross/Net District Domestic Product and Per Capita Net District GDDP (Rs. Bn) NDDP (Rs. Bn) Per Capita NDDP (Rs) FY11 FY12 FY11 FY12 FY11 FY12 Pune 1,175.07 1,376.51 1,041.96 1,222.74 121,712 140,570 GSDP (Rs. Bn) NSDP (Rs. Bn) Per Capita NSDP (Rs) FY11 FY12 FY11 FY12 FY11 FY12 Maharashtra 10,350.86 11,995.48 9,343.76 10,827.51 83,395 95,339 Source: Directorate of Economics and Statistics Economic Survey of Maharashtra 2012-13 Table No. 4.4.2.2 Gross/net district domestic product and per capita net district income Per Capita Net At Current Prices (Rs Crore) At Constant (2004-05) Prices (Rs Crore) District Domestic

Product At current prices District GDDP NDDP GDDP NDDP (Rs) 2011- 2012- 2011- 2012- 2011- 2012- 2011- 2012- 2011- 2012-13+ 12++ 13+ 12++ 13+ 12++ 13+ 12++ 13+ 12++ Pune 1,33,432 1,49,502 1,19,170 1,33,390 88,627 93,562 78,057 82,208 1,37,001 1,50,969

Satara 25,790 28,341 23,538 25,798 16,754 17,440 15,156 15,733 74,989 81,488

Sangli 25,860 28,499 23,659 26,015 17,129 18,003 15,568 16,328 80,507 87,615

Solapur 34,733 37,076 31,988 33,983 21,866 22,324 19,974 20,304 72,150 75,769

Kolhapur 40,887 45,576 37,371 41,558 27,092 28,991 24,595 26,250 92,414 75,769

Pune DIV. 2,60,702 2,88,995 2,35,725 2,60,744 1,71,468 1,80,320 1,53,350 1,60,822 1,01,372 1,10,742

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Table No. 4.4.2.3 Gross/net district domestic product and per capita net district income comparison City (Municipal State India Indicator Corporation) (Urban) (Urban) Per Capita Income (Rs.) at 2004-05 constant price * 88341 60431 Rs. 35,947 Urban Poverty Ratio (% of urban population) ** 2.73 9.1 13.7 Unemployment Rate, 2011-12*** 3.29 2.3 3.4 Work Participated Rate, 2011-12*** 35.07 36.5 35.5 Work Status, 2012-12 (%) *** Self-employed: 28.00 36.1 42.0 Regular/wage salaried employees: 66.38 54.6 43.4 Casual labor: 5.62 9.4 14.6 Sectoral Distribution of Workers, 2011-12 (%)** Primary 0.34 4.8 7.5 Secondary 32.16 31.3 34.2 Tertiary 67.50 64.0 58.3 Workers Classified by Major Occupation, 2011- 12(%) *** Legislators, senior officials and managers 20.52 17.9 15.8 Professionals 19.49 11.6 8.8 Technicians and associate professionals 5.55 6.1 6.7 Clerks 7.57 7.3 5 Service workers and shop and market sales workers 12.36 13 14.7 Skilled agricultural and fishery workers 0.28 3 4.6 Craft and related trades workers 12.95 14.4 19.2 Plant and machine operators and assemblers 11.77 10.2 9.2 Elementary occupations 9.52 16.4 16.1 Workers Classified by Occupation 0 0 0.1 1. Automobile engineering Primary Commodity Manufactured 2. Software 3. Chemical engineering Metallic - Automobile Spare Parts Machine Tools Major Industries Nonmetallic - IT Industries & Software Technology Parts Agro Based No. of sanctioned SEZ 20 70 413 Note: 3 years average of 2009-10, 2010-11 and 2011-12 Source: * Directorate of Economics and Statistics of respective State Government and for all India- Central Statistics Office **Unit Level Data of National Sample Survey Organization, Household Consumer Expenditure in India, 68* Round, 2011-12 ***Unit level Data of National Sample Survey Organization, Employment and Unemployment Situation in India, 68* Round, 2011-12 * District Census Handbook, Census of India, 2011 *District Industrial Profile, Micro, Small and Medium Enterprise, Government of India * Department of Commerce, Ministry of Commerce and Industry

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4.4.3 Industrial Scenario

Companies in Pune are engaged in manufacturing of auto components, locomotives, agro-based products, electronic consumer durables, pharmaceuticals, chemicals, and IT software among others. Phillips India, Bajaj Auto, Kirloskar Cummins, Mahindra and Mahindra, Tata Electric and Locomotive Company, Mercedes Benz India Ltd, Alfa Laval, SKF Bearings, Weikfield India, and Kirloskar Pneumatics are some of the large- scale companies located in and around Pune.

Figure 4.1 Indian Automobile Clusters

The above figure portrays zones and the key areas within those zones with some important players which affect the growth potential of the region. Pune district is one of the important industrial areas in the western zone of automobile cluster. Most of the players have their factory locations in and around Pune.

As of Dec 31, 2012, Pune had 168 private IT parks counting Rajiv Gandhi Infotech Park, Quadron Business Park, Talawade IT Park and EON IT Park among others. It also has a public Bio-Technology park industrialized by MIDC at Hinjewadi. Pune division has 45 sanctioned and 38 functioning co-operative industrial estates with 3,150 industrial units under operation. As of July 2015, Pune district has 17 MIDC zones

129 covering a total area of 7,957 hectares (ha). The MIDC zones in Pune can be clearly understood in the following table no 4.4.3.1.

Table No. 4.4.3.1 MIDC Zones in Pune: As on July 2015 Sr. No. MIDC Zones 1 Pimpri Chinchwad 2 Talegaon 3 Chakan (Phase 1, 2, 3) 4 5 6 Kurkumbh 7 Baramati 8 9 Pandare 10 Indapur 11 Khardi Knowledge Park 12 Info tech park (Hinjewadi Phase 1, 2, 3) 13 Talawade Source: MIDC - District Profile of Maharashtra

Each zone plays a significant part in industrial growth of that district. Also, every zone has specific potential due to its geographical location &propinquity to numerous resources which backs in the process. With respect to expansion& growth of automobile industries, the three major MIDC zones Pimpri-Chinchwad, Chakan, Talegaon contribute and play a vital role in this context. All the giant Indian manufacturers &foreign players have their factory setups in these zones employing more than 50,000+ skilled & unskilled manpower.

Pimpri-Chinchwad has key automobile players such as Bajaj Auto ltd., Premier Motors, , etc. Talegaon MIDC registers companies such as Hyundai, General Motor India Pvt Ltd, etc. whereas Chakan MIDC names many giant players such as Mahindra & Mahindra, Volkswagen, Man trucks, Mercedes-Benz, etc. Few more forthcoming investments in the other zones enhances the growth and contribution in the automobile manufacturing segment. The names cited are only large players but not restricted to these players, many support ancillary units, allied players play very critical role. 130

4.4.3.1 Special Economic Zones

IT & ITES sector is one of the most protuberant sectors with some of the leading IT & ITES companies based in Pune including Infosys Ltd, Wipro Ltd, and Syntel International Ltd among others. Graph No. 4.4.3.1.1

Out of the total 12 functioning SEZs in Pune, 75% of the SEZs are purely IT & ITES sector related which can be clearly seen in above graph no 4.4.3.1.1. Further, out of total of 30 formally approved SEZs in Pune, 80% are based on IT/ITES and electronic hardware segment and has the major share in the total permitted SEZs in Pune. Around 60% of the officially permitted SEZs in Pune are purely IT & ITES based, while 20% are electronic hardware cum IT & ITES based. This is can be easily understood from the following graph no 4.4.3.1.2

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Graph No. 4.4.3.1.2

4.4.3.2 Infrastructure

Infrastructure is very crucial for success of any industry segment. The government has proven that by creating feasible infrastructure for automobile companies and which is useful for others too. MSRDC (Maharashtra State Road Development Corporation) in FY02 created Mumbai-Pune Express Way (MPEW) fetched Pune close to Mumbai. MSRDC also finished several combined road development programs in Pune district, specifically in Pune and Baramati talukas. MSRDC has also commenced the project of supplementing MPEW, which will outcome in healthier road connection between Pune and Mumbai.

Public passenger transport is the chief mode of district. Maharashtra State Road Transport Corporation (MSRTC) and Pune Mahanagar Parivahan Mahamandal Ltd (PMPML) are the key public transport service providers in Pune. Pune has second highest domestic air passenger and air cargo traffic in Maharashtra. During FY12, recorded domestic air passenger traffic of 3.2 mn and air cargo traffic of 24,134 tonnes.

In appreciation of the incredible potential of Pune region, it has been recognized for future development by way of government initiatives such as 84 projects being authorized for Pune as part of the Pune Smart City endeavor.

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4.5 Automobile industry with reference to Pune district

4.5.1 Global perspective

The design, manufacture and sales of automobiles drive economic growth around the world. Automobiles represent freedom and economic growth. Automobiles are a redeeming technology for people around the world. The personal automobile permits people to live, work and play in ways that were unconceivable a century ago. Automobiles provide access to markets, to doctors, to jobs. Approximately, every car trip ends with either an economic transaction or some other benefit to our quality of life.

The global auto industry is a vital sector of the economy for every main country in the world. The industry continues to grow, registering a 30 percent increase over the past decades.

The construction of 60 million vehicles requires the use of nearly 9 million people directly in the manufacturing of vehicles and parts that enter them. This represents more than 5 per cent of total manufacturing employment in the world. It is estimated that each direct auto job supports at least 5 other indirect jobs in the community, resulting in more than 50 million jobs due to the auto industry. Many people work in manufacturing and related services. Cars are built using goods from many industries, including steel, iron, aluminum, glass, plastic, glass, carpet, textile, computer chips, and rubber.

4.5.2 National perspective

The core automobile industry is the pillar of the global economy with its technological advances, stability and growth in developing and developed countries. The Indian automobile industry is the sixth largest automaker in the world and has grown with an increase of 14.4% over the last decade. The Indian industry has 35 carmakers and contributes 7% of GDP in India while the global industry contributes about 3%. Passenger Indian automobile industry includes small cars positioned third and fifth commercial vehicles registered in the top ten segments in the world, according to SIAM (Society of Indian Automobile Manufactures).

The 70% of market share of automobile sector is with three companies having manufacturing setup in Pune. Following graph no 4.5.2.1 depicts the market share of automobile sector in India. 133

Graph No. 4.5.2.1

India market share of automobile industry

Maruti 6.50% 1.10% 2.60% Hyundai 3.50% Mahindra 4.50% Honda 4.60% Toyota 47.00% 5.40% Renault Tata Motors 7.50 % Ford VW Others 17.30%

Across India, the industry has 15 automakers of MUVs and passenger cars and 9 automakers of commercial vehicles. With enhanced products in terms of infrastructure, stylish, comfortable and efficiency, the Indian Industry is emerging on a daily basis and upgraded its contribution in the auto industry as well as India GDP. On yearly basis, the industry sold 5100 passenger vehicles (PVs), 360 LCVS, 390 M&HCVS in 2015 but this sales-structure will be improved by the year, 2020 to 8,700-9700 units of PVs, 470-530 LCVs and 540-600 M&HCVs.

In fact, the auto industry, has multiple auto makers Volkswagen India, Mahindra & Mahindra, Maruti Suzuki, etc. are planning to make associations with Australian companies to increase its efficiency in product design, R&D, development and engineering.

Some of the key facts of Indian Auto Industry according to SIAM:

 Jaguar Land Rover, the UK-based automobile company, strategies to manufacture Land Rover SUV for the local market and as well as for export, most possibly at its plant in Pune.

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 Italian automobile manufacturer Fiat has declared its plans to start local production at Ranjangoan plant in Pune from the second quarter of next year at the launch of its two sports utility vehicles (SUVs), namely Jeep Wrangler and Grand Cherokee.

 MV Agusta, the Italy-based premium motorcycle manufacturer, has entered India through an exclusive partnership with Pune-based Kinetic group with the launch of three luxury bikes, which will be sold through the ‘Motoroyale’ chain in Pune.

 US-based car maker Chrysler has planned to invest Rs. 3,500 crores (US$ 513.5 million) in Maharashtra, to manufacture Jeep Grand Cherokee model.

 The India’s passenger vehicle sector will sell 5 million vehicles in the period of 2017-2018 and even cross Japan in sales-structure.

 The share of Indian auto industry of India nearly tripled in the global export business in the year, 2016.

 The auto export business of India grew to $ 17.64 billion ($ 5.62 billion-ending march 2011) in the duration of 2015-2016.

 Passenger vehicles production of India reached 5.1 million vehicles by 2015 and is estimated to reach nearly 9.7 million vehicles by 2020. Domestic sale of three wheelers in India increased at a CAGR of 3.79 percent during 2010-16

 As per the Government of India’s Automobile Mission Plan - 2016; the turnover will improve from $35billion to $145billion, export business will grow from $4.1billion to $35 billion and the employment will be increase to 25million+.

 Auto industry contributed to nearly 10% in India GDP and 30-35% of the industrial GDP in 2016.

 India is the world’s second-largest two-wheeler manufacturer. India is the world’s sixth largest vehicles manufacturer globally. Further, India is the Asia’s second largest two-wheeler manufacturer and fifth largest producer of commercial vehicles, fourth largest manufacturer of passenger car and the largest manufacturer of tractors.

 Passenger vehicle production is estimated to nearly triple by 2020

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 Domestic sales of passenger vehicles in India is expected to increase at a CAGR of 12.87 per cent during 2016-26

 Domestic sales of commercial vehicles in India is expected to increase at a CAGR of 11.07 per cent during 2016-26

Figure 4.2

Facts of Automobile Industry in India

4.5.3 Automobile industry in Pune district

Pune is the leading center for the automobile sector in India; as well as one of the highest automobile centers globally. In the past year alone, 3 massive new plants from , Volkswagen and Mahindra & Mahindra were inaugurated here. The Chakan- Talegaon Belt is becoming one of the most dense automobile clusters in the world.

Near Mumbai, Maharashtra, along the Chakan corridor near Pune, is the western cluster, with a 33% share of the market. Audi, Volkswagen, and Skoda are located in . Mahindra and Mahindra has an SUV and engine assembly plant

136 at . General Motors, Tata Motors, Mercedes Benz, Land Rover, Jaguar Cars, Fiat, and Force Motors have assembly plants in the area.

4.5.3.1 Industrial clusters

Some of the different industrial clusters with reference to the automobile industry are summarized in following table no 4.5.3.1.1, table no 4.5.3.1.2 and table no 4.5.3.1.3.

Table No. 4.5.3.1.1 Auto Ancillary, Pimpri- Chinchwad, Bhosri, Pune 1. Principal Products Manufactured in Engineering, Machines Components the cluster and auto parts. 2. Name of the SPV - 3. No. of functional units in the cluster 46 4. Turnover of the clusters (Rs. In lack) 1664

Table No. 4.5.3.1.2 Baramati Regional Engineering & Auto Cluster Ltd., MIDC, Baramati, Dist. Pune. 1. Principal Products Manufactured in Auto Machine Components, Press the cluster Tools and parts, Die & Mould 2. Name of the SPV - 3. No. of functional units in the cluster 152 4. Turnover of the clusters (Rs. In lack) 11000

Table No. 4.5.3.1.3 General Engineering & Allied industries Cluster, MIDC Area, Bhosri, Pune. 1. Principal Products Manufacturing of Machine Components, Press Tools and Manufactured in the Parts, Die and Moulds, Jig. & Fixtures and General cluster Engineering Sector related services and CAD/CAM Services etc. 2. Name of the SPV - 3. No. of functional units 450 in the cluster 4. Turnover of the (Rs. In lack) 13000 clusters

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4.5.3.2 Major automobile companies in Pune district

Numerous automobile manufacturers and ancillary companies have today invested heavily to set up state-of-the-art production facilities in Pune. Amongst the first movers in this segment were Tata Motors (then known as Telco) and Cummins, a leading manufacturer of diesel and natural gas engines, and in recent years, Mercedes-Benz and construction & farm-equipment major JCB.

The Automobile Research Institute of India is also located here and provides research, development, testing and certification services. Set on driving increase in the state, the Maharashtra government has played a crucial role in attracting investment and broadening the scope of industry.

A prime example is General Electric’s (GE) Multi-modal Manufacturing Facility, one of the company’s most advanced.

MERCEDES-BENZ Country of Origin: Germany

Founded: 1886

Location: Chakan, Pune

Number of employees in India: 1,500

Mercedes-Benz India has been manufacturing in India since 1994 at the Pimpri- Chinchwad plant in the metropolitan area of Pune. In 2009, it formed a world-class production facility spread over 100 acres in Chakan, near Pune, with an investment of more than Rs. 1,000 crores. The new extended facility now has the largest installed capacity of 20,000 units per year and is the only factory outside Germany to produce the Maybach Mercedes-S500.

Production of Mercedes-Benz India deploys eight models with a localization level of 60%. These locally made models account for 80% of the sales volume in India.

The Pune plant is located in Chakan and is a 100% subsidiary of Daimler AG. This is one of the most successful automobile companies in the world. At present, it is dedicated to

138 the local production of Mercedes-Benz cars. The Mercedes Benz won the distinction of starting production of the new class of luxury full-size world-class GL SUV Mercedes- Benz India is in Chakan.

TATA MOTORS

Country of Origin: India

Location: Pimpri, Pune

Founded: 1945

Tata Motors is a premier name in Indian car players. As one of the first regional manufacturing units, it has an annual installed capacity of more than half a million vehicles, complying with the requirements of national and international markets. This facility is even more special because of its ability to design, develop and manufacture a full range of commercial and passenger vehicles and a wide variety of individual components and aggregates, making it one of the most integrated automobile manufacturing centers from the country.

Tata Motors Limited is the largest car company in India. Tata Motors is famous for the Nano, Vista, Indica, Indigo and Manza models, as well as light commercial vehicle models including Tata Ace, Risk Premium and Winger, etc. It has recognized itself as the market leader in each segment and is also one of the top three passenger cars with win in that specific car segment. This is one of the main players in the Pune automobile sector with a strong workforce of 24,000 employees.

The vast campus of Pune consists of its headquarters, its R&D center and the manufacturing facilities for its automobiles and trucks. Recently acquired Land Rover obtains the assembly of some models of the facilities of Tata Motors Pimpri-Chinchwad.

Over the past decade, Tata Motors has expanded its capabilities by acquiring 100% of Hispano Carrocera SA (HC) shares, a well-known Spanish bus company in October 2009, the Jaguar and Land Rover brands and the States - one with 100% ownership in March 2008, Daewoo Commercial Company of vehicles Korea in 2004.

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BAJAJ AUTO

Country of Origin: India

Location: Akurdi, Pune

Founded: 1945

Bajaj Auto was one of the early automobile players in Pune. They have big base in Akurdi, Pune (R&D, Corporate and Manufacturing). A large new plant has been recently opened at Chakan. Bajaj Auto is mainly known for two wheelers & three wheelers; it is the majority market share holder in two-wheeler industry. Recently the company has decided to enter into low cost four-wheeler industry and testing its vehicle for market launch. Bajaj is exporting its four-wheeler make RE in African markets as it did not get permission to launch the same in Indian market due to some security reasons.

Bajaj Auto is the second largest two-wheeler manufacturer in India and sixth largest in the world. Bajaj Auto employs approx. 10,000 people in different sections & functions and at different locations.

MAHINDRA AND MAHINDRA

Country of origin: India

Location: Chakan Pune

Founded: 1947

Mahindra started automobile manufacturing in 1947. Its total revenue came to 16.2 billion dollars. There are more than 1 million employees working in Mahindra and Mahindra. Mahindra & Mahindra is the third player in terms of market share in the car manufacturing segment in India. The total production capacity of the plant is 300,000 vehicles per year. The Mahindra and Mahindra Chakan plant, with a workforce of 2,000 people.

The popular cars under this brand are Bolero, Scorpio, Verito and Xylo12.

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VOLKSWAGEN:

Country of Origin: Germany

Location: Chakan, Pune

Founded: 1937

The Volkswagen plant in Chakan occupies a total area of more than 2.3 million square meters (575 acres) with buildings covering approximately 1,15,000 square meters. It is the largest investment of a German company to date in the growing market of India. The Volkswagen plant in Chakan has an annual production capability of 130,000 vehicles per year. The Volkswagen plant in Pune Chakan is one of the most modern in the Volkswagen Group. Volkswagen's market share is around 2.95%. Popular cars of this brand are Polo, Vento, Jetta, Beetle, Passat, Phaeton and Touareg13.

JCB Country of Origin: United Kingdom

Founded: 1945 Number of employees in India: 5,000

JCB’s two world-class manufacturing facilities in Pune house the Heavy Line Business for JCB in India. This includes manufacturing excavators, loaders, compaction equipment and fabrications, with an annual capacity of 4,500 units. This facility also has a global manufacturing unit for the compaction business and caters to the global demand for compaction equipment.

The company started in India as a joint venture in 1979; though, it is now a completely owned subsidiary of JC Bamford Excavators. JCB’s largest Design Centre outside of the UK is in India, situated at Pune, with over 400 engineers employed here. Today, exports comprise 20% of JCB India’s revenues.

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CUMMINS Country of Origin: United States Founded: 1919 Number of employees in India: 9,700 The company selected Pune as its manufacturing destination relatively early on, in the ’60s. Today, the group includes 20 manufacturing facilities all across India. Amongst these, the Cummins Mega site, located in Phaltan (about 110km from Pune), is a 225-acre state-of-the-art campus that combines all current operations for the Cummins Group in India. The company has customer existence in more than 160 countries through its network of 550 company–owned and independent distributor facilities and more than 5,000 dealer locations.

GE Country of Origin: United States

Founded: 1892

Location: Talegaon, Pune

Number of employees in India: 18,000

The company has had a long-standing presence in India spanning 110 years and has been operating in the Pune area since 2010. In February 2015, GE’s 68-acre Multi-modal Manufacturing Facility (MMF) was inaugurated at Chakan in Pune.

The MMF in Pune is one of GE’s highly progressive facilities with automation, the industrial Internet and 3D printing. This is the first of its kind in the world, where GE can make the products of its different businesses - oil and gas, energy, aviation, renewable energy and transportation - under one roof. This facility goals to exploit on the economies of scale that such a varied production unit propositions. The MMF currently has over 500 employees, and women form more than 25% of the highly skilled workforce.

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General Motors: General Motors has been a key player in the global auto industry for more than 100 years. Recently announced to make move out of Indian market. There are more than 121,000 employees who work for General Motors in six continents. General motors is a foremost name amongst the automobile companies in India. It is the 5th largest automobile manufacturing company in India. It initiated operations in India in the year 1996 when it set up a manufacturing unit in Halol. It has two manufacturing plants. One is at Halol and the second unit of General Motors is at Talegaon in Pune. It manufactures a wide range of vehicles like trucks and heavy vehicles to cars. The popular cars of this brand include Abio, Spark and Chevrolet14.

FIAT INDIA LIMITED

Country of Origin: UK

Founded: 1997

Location: Ranjangaon, Pune

Number of employees in India: 18,000

It is an Indian subsidiary of Fiat Group Automobiles, Italy. Fiat India Automobiles Limited was started on 2nd January 1997.The Company currently has 2600 employees and is located at Ranjangaon in Pune District. The plant has a capacity to produce 100,000 cars, 200,000 engines and other components. The arrangement of the joint venture between Fiat and Tata was signed on 19th October 2007. The company is primarily focusing on production and selling of the Fiat Linea, Punto models, which are being manufactured by the Tata –Fiat joint venture plant at Ranjangaon. The company strategies to double the production capacity for both car units and engines in the next few years.

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BRIDGESTONE

Country of Origin: Japan

Founded: 1931

Location: Chakan, Pune

Number of employees in India: 5,000

Bridgestone started operations in India twenty years back, and has become one of the most renowned supplier to almost all the reputed original Equipment manufacturing companies in India. To cater to demands of the Indian market Bridgestone has set up its Stat-of-art manufacturing plants in Chakan industrial area in Pune.

FORCE MOTORS

Country of Origin: India

Founded: 1958

Location: Akurdi, Pune

Number of employees in India: 8500

Force Motors belongs to the Dr. Abhay Firodia Group. The Company is well equipped to manufacture the Light Commercial Vehicles (LCV) having iconic brands in their portfolio like Tempo, Matador, Minidor, Matador and Traveller. The company has very good strategic tie-ups with global brands which led to the comprehensive development of expertise in the field of design, development, and production for the entire range of automobiles. It has strategic relations with companies like Bosch, MAN, ZF, & Daimler etc. The Company has a certified for ISO 14001, OHSAS 18001. The Company also exports it complete range of products in various parts of world mainly in Africa, Latin America, SAARC, & Gulf.

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4.5.4 Summary

Pune region is blessed with geographical proximity, healthy environment, and skilled manpower. This has attracted many large brands - Local & international across the world. Apart from the car manufacturing companies there is the Automobile Research Association of India (ARAI) situated at Pune. It provides expertise to the Indian automobile industries. It is a research and development center for automobile industry in India. It is striving to achieve international recognition in the testing and evaluation of components. It provides design and development expertise. It keeps pace with global economy and standards. It is involved in testing and evaluation of components and systems.

It provides technical expertise for research and development to the automobile manufacturing industries, helps to meet national and international standards, helps to meet the requirements of the automobile industries in India and around the world. It plays an important role in assuring safe, more efficient and less polluting vehicles by providing certification, testing, homologation and framing of vehicle regulations. It works in harmony and complete confidence with its members, customers and the Government of India to offer the finest services, which earned for itself ISO 9001, ISO 14001 and other essential accreditations.

The Pune region is also hub of education and this leads to availability of skilled & talented manpower support. Any growing industry required the ample of resources to support their manufacturing and production along with strong engineering and R&D skillset. MUMBAI-PUNE-NASHIK-AURANGABAD together forms a western cluster for automobile. This cluster has developed some favorable conditions for the development of the auto cluster by providing equilibrium of factor conditions, demand conditions, context for strategy and rivalry which leads to growth and perfect supporting industries.

To recapitulate the Pune district gives holistic picture about the automobile industry. In this chapter researcher, has briefly assessed the socio-economic profile of Pune district which supports the growth of the automobile & allied industries.

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The reasons for selecting Pune region are

1) It has a proper blend of Global multinational corporations, Large Indian organizations & small & medium scale enterprises in the automobile industry.

2) To serve this industry Pune has formidable resources such as manpower, technical support in form of R&D institutes, academia, & govt. incentives and supporting infrastructure for the growth of the industry.

3) Proximity of this location to Mumbai, the economical hub of India and favorable access to raw material & ease of exports which contributes to strengthening Pune’s position as valuable region in Indian automobile industry.

4) Pune as an industrial hub and particularly in the auto industry

5) Contribution of auto industry in the economy at a global scale as well as national level

6) Presence of leading auto players in the region

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4.6 References

1. http://pune.nic.in/

2. http://www.census2011.co.in/district.php

3. https://www.araiindia.com

4. https://www.mercedes-benz.co.in

5. https://www.tatamotors.com

6. http://www.bajajauto.com/bajaj_corporate.asp

7. http://www.mahindra.com

8. https://www.volkswagen.co.in/

9. https://www.jcb.com/en-in

10. https://www.cumminsindia.com/

11. https://www.ge.com/in

12. https://www.fiat-india.com/about-fiat/

13. https://www.bridgestone.co.in/

14. https://www.forcemotors.com/

15. http://www.siamindia.com/

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