Chennai Floods: Automotive Hub May Rack Up $2.2 Billion in Losses

The Chennai floods have disrupted production in the automotive industrial hub located on the outskirts of the city. Chennai received an astonishing 374mm of rain on 1 December which is almost twice the average rainfall that it receives during the entire month. ASSOCHAM estimates business losses to the tune of $2.2 billion.

By Ishaan Rastogi

1 mins read

Published on December 4, 2015

Highlights

The unexpected onslaught of heavy rains in the southern state of Tamil Nadu has battered Chennai's automotive industry. The industrial area that lies on the outskirts of Chennai is considered to be the 'Detroit of India' as it houses one of India's largest automotive hubs. The torrential rainfall has forced numerous plants to shut shop for an unprecedented second time in less than a month and has crippled production, sales, and deliveries. Ford, Daimler, and Apollo Tyres are just 3 of the many automotive manufacturers affected, many of whom told employees to stay home on Wednesday. Chennai witnessed the heaviest rainfall in a hundred years which caused rampant flooding and made it impossible for people to travel through low-lying parts of the city. Ford Motors had also shut its manufacturing facility which has a capacity of making 340,000 engines and 200,000 cars per year. Also Read: Chennai Floods: Hyundai, Ford, and Renault Suspend Operations Speaking with regards to Ford's temporary hiatus in operations, a spokesperson stated," For the safety of our employees, we have halted production at our Chennai assembly and engine plants on Wednesday. We are carefully monitoring the situation and will return to normal operations as soon as conditions improve." Other companies affected by the Chennai rains include Renault-Nissan, BMW, Hyundai Motor Company and TVS Motorcycles, whose share price dropped by almost 4 per cent on Wednesday. A Renault-Nissan India spokesperson said that the company would be cancelling shifts but was aiming to resume operations the moment conditions got better as there had been no heavy damage to its manufacturing facility. Also Read: Chennai Rains: Apollo Tyres Halts Production As per statistics released by Skymet, Chennai was lashed with approximately 1,219mm of rainfall in November which itself was almost three times the average. However the first day of December received an astonishing 374mm in 24 hours. To put things into perspective, the average rainfall that the city receives over the entire month of December is just 191mm. The Associated Chambers of Commerce and Industry of India (ASSOCHAM), one the countries apex trade associations, estimated that the Chennai floods had resulted in business losses to the tune of $2.2 billion.