By Tamil Nadu, the hub of automobile manufacturing in India, is aiming to become the automotive electronics capital of the country, as it leverages its strengths in electronics hardware, software, and education. The state government has announced several policies and incentives to attract investments and innovation in the automotive electronics sector, which is expected to grow rapidly in the coming years.
Automotive electronics refers to the use of electronic components and systems in vehicles, such as sensors, actuators, controllers, displays, and communication devices. Automotive electronics enable various features and functions, such as engine management, safety, entertainment, navigation, and connectivity.
The automotive electronics sector is witnessing a surge in demand and innovation, as vehicles become more intelligent, connected, and electrified. According to a report by MarketsandMarkets, the global automotive electronics market is projected to grow from $228.3 billion in 2020 to $382.1 billion by 2026, at a compound annual growth rate (CAGR) of 9%.
However, the automotive electronics sector also faces some challenges, such as the complexity and cost of the systems, the compatibility and interoperability of the devices, the security and privacy of the data, and the environmental and health impacts of the materials.
The strategy and the achievements of Tamil Nadu
Tamil Nadu, which accounts for 40% of India’s automobile production and 30% of its electronics exports, is well-positioned to harness the opportunities and overcome the challenges of the automotive electronics sector. The state has a strong ecosystem of automobile and electronics manufacturers, suppliers, and service providers, as well as a pool of skilled and educated talent.
The state government has also taken several initiatives to promote and support the automotive electronics sector, such as:
- Launching the Electronic Hardware Manufacturing Policy 2020, which aims to increase the electronics output of the state to $100 billion by 2025, and create 10 lakh direct and indirect jobs.
- Launching the Semiconductor and Advanced Electronics Policy 2020, which aims to attract investments of $5 billion and create 1 lakh direct and indirect jobs in the semiconductor and advanced electronics sector by 2025.
- Offering various incentives and subsidies to the investors and entrepreneurs in the automotive electronics sector, such as capital subsidy, land subsidy, power subsidy, tax exemption, and interest subsidy.
- Establishing various infrastructure and innovation facilities, such as the Chennai-Bengaluru Defence Industrial Corridor, the Tamil Nadu Defence Industrial Park, the Tamil Nadu Hardware Park, and the Centre of Excellence for Automotive Electronics.
These initiatives have resulted in several achievements and recognitions for the state, such as:
- Signing eight memorandums of understanding (MoUs) with a total investment commitment of Rs 40,000 crore and employment potential of 12,150 jobs in the electronics sector since July 2021, according to Guidance Tamil Nadu, the nodal agency for investment promotion in the state.
- Becoming the first state in India to launch a dedicated policy for the semiconductor and advanced electronics sector, which has attracted the interest of several global and domestic players, such as IGSS Ventures, which has proposed to invest Rs 25,600 crore in a semiconductor fabrication unit in the state.
- Winning several awards and accolades for its performance and potential in the automotive and electronics sectors, such as the Skoch Award for Best State in Automobiles, the India Today Award for Best State in Electronics, and the Electronics For You Award for Most Promising State for Electronics Manufacturing.
The vision and the outlook of Tamil Nadu
Tamil Nadu has a clear vision and a positive outlook for the automotive electronics sector, as it aims to become the leader and the innovator in the field. The state is focusing on the following aspects to achieve its vision:
- Enhancing the value addition and the competitiveness of the automotive electronics products and services, by moving up the value chain from assembly to design and development.
- Expanding the scope and the scale of the automotive electronics sector, by catering to the emerging segments and markets, such as electric vehicles, autonomous vehicles, connected vehicles, and smart mobility solutions.
- Fostering the collaboration and the synergy of the automotive electronics sector, by creating a conducive and supportive environment for the stakeholders, such as the industry, the academia, the research institutions, and the government.