Indian Automaker’s Plant Is Latest Sign of Detroit Comeback

The comeback of Detroit is seemingly entering a new phase as the once birthplace of the American auto industry and a steady producer of the manufacturing jobs which helped it to be identified as the Motor City, has been in decline for years now.

And of places, an Indian automaker announced the setting up of an auto plant in the area after a gap of about 25 years.

Starting next year, off-road recreational and work vehicles at the plant, in Auburn Hills would be produced by the Mumbai-based Mahindra Group, the company said. And indication that this step could be the first in many that the company has planned for its ambitions for the American market.

“None of us really know where this journey will take us,” said Rick Haas, chief executive of Mahindra’s North American auto group. “But we are here to expand Mahindra’s auto business in the U.S.”

Elon Musk, another automotive entrepreneur, has also provided a cue for the company’s chairman, Anand G. Mahindra. The present times has eliminated the traditional barriers to automotive success, he said while illustrating the success of Mr. Musk’s electric-car start-up, Tesla.

“How many people told Elon Musk, ‘You don’t have any hope of getting into the car business’?” he said.

Till now, primarily known in the United States as the world’s leading maker of tractors, Mahindra is actually a major producer of cars and trucks in India and South Korea. And the company’s American businesses had Detroit in focus and it also includes manufacturing electric bikes and scooters, Mr. Mahindra said.

“We have a responsibility to contribute to the resurgence of Detroit,” Mr. Mahindra said at the plant’s opening ceremony. “That means jobs, and that means investment.”

The fact that the Detroit area is again attracting automotive investment has shifted the focus from the pale panned production volume in the new factory in comparison to what large, mainstream auto plants churn out from the production lines.

Detroit still remains a source of technology incubator for electric cars and self-driving systems and is a major source of engineering talent and manufacturing expertise. Turning out prototypes of future vehicles, Troy, half an hour north of Detroit, is the place where Mahindra already has an operational design and engineering center.

Big investments throughout the upper Midwest and Detroit have been made by other foreign companies. An automotive glass plant in in Moraine, Ohio and a former General Motors steering-gear division in Saginaw, Mich have been bought by Chinese firms. The operations of the Indian firm Sakthi Automotive, one of the biggest auto suppliers in Detroit, is expanding its operations into a long- shuttered high school on the city’s hardscrabble southwest side.

So far, 270 people are employed in $230 million invested plant, the technical center and two related operations of Mahindra and as such the company’s footprint in the Detroit area is small. Mahindra is building its factory at Auburn Hills site, in Detroit’s northern suburbs which had been empty for a long time following the closure of an engineering firm there. For the first year, about 5,000 off-road vehicles are being planned to be manufactured by the company at the factory following which the production would be enhanced in later years.

(Adapted from The New York Times)


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