Thursday, Dec 01, 2022

Chennai auto, IT firms suspend operations in the face of floods

Initial estimates suggest that the financial losses from the torrential rains and floods in Tamil Nadu may exceed Rs 15,000 cr.

Incessant rains and floods in and around Chennai, a big automobile manufacturing and IT hub, has badly derailed the business activity in the city as companies stopped their production activity and shut down offices with instruction for employees to stay home or work from home.

Home to over 165 BSE-listed companies (registered in Chennai) with an aggregate market capitalisation of over Rs 285,000 crore, the city is one of the biggest business centres in the country and the floods have caused major loss for companies as they were forced to shut their production facilities and operations were halted at IT hubs. Initial estimates suggest that the financial losses from the torrential rains and floods in Tamil Nadu may exceed Rs 15,000 crore.

The well-established presence of the automobile industry around the city include factories of Hyundai, Ford, BMW, Nissan, TVS, Renault-Nissan and Ashok Leyland, most of which were forced to shut production.

Commercial vehicle manufacturer Ashok Leyland has a plant at Ennore near Chennai, which accounts for about 40 per cent of the company’s production that span 18-seater to 82-seater double-decker buses and 7.5 tonne to 49 tonne haulage vehicles.

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Hyundai Motor India Ltd’s facility in Sriperumbudur near Chennai has two plants producing 680,000 units between them. “Hyundai Motor India decided not to operate all three shifts today (Wednesday) and the first shift tomorrow (Thursday). This is the situation as of December 2, 5 PM and we are monitoring the situation,” HMIL said.

Ford with an annual capacity of 3.4 lakh engines and 2 lakh vehicles has also shut its plant down. “Continued heavy rains in Chennai have resulted in significant flooding in the area with many roads impassable. For the safety of our employees, we have halted production at our Chennai assembly and engine plants on Wednesday. We are monitoring the situation and will return to normal operations as soon as conditions improve… Most employees come from some distance away and so our primary focus is their safety. In all, we’ve had about three and a half days of shutdown,” a Ford India executive said.

The BMW Group too shut down production at its Chennai plant. In its statement, the BMW Group said, “Heavy rainfall has severely affected employee transportation in Chennai since December 1, 2015. Due to which BMW Plant in Chennai will not be able to undertake any production activities during December 1-4, 2015.”


TVS Motor Company, which is based in Chennai, had reported that over the last three weeks, the company suffered sales loss of approximately 15,000 units due to inclement weather. Delhi-based dealer for Renault-Nissan said that dealerships have been forewarned of the possibility of disruptions in shipments in the coming weeks on account of the current disruption in production.

“The financial loss due to record-breaking rainfall in Chennai and several parts of Tamil Nadu may even exceed Rs 15,000 crore mark as Chennai has come to a virtual standstill and is in the grip of fear and panic,” Assocham said on Wednesday.

Auto ancillary units around Chennai include Wabco India Ltd, Delphi-TVS Diesel Systems Ltd, Visteon and Caterpillar, among others. Chennai-based tyre manufacturers include Apollo Tyres, Bridgestone, JK Tyres, Michelin and MRF.


Software exporters have invoked Business Continuity Plans, which in tech parlance is an intimation to the company’s other centres across the country to lend a hand to projects handled from Chennai. The largest among them, Tata Consultancy Services is learnt to have partially shut down its Chennai offices. HCL Technologies has also witnessed an impact and has shut its offices.

First published on: 03-12-2015 at 12:51:03 am
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