What’s Behind the Rise of Automotive Industrial Warehouses in Pune-Chakan?
Once a humble university town, Pune region today is a bustling epicentre of industrial and automotive excellence. A transformation, which in the modern day, attracts significant global attention and investments. This industrial journey of the locations in and around Pune began in the 1960s. Kickstarted by the arrival of pioneering auto manufacturing giants: Bajaj Auto and Tata Motors, this region today houses electronics, electric vehicles (EVs) and renewables sectors. It is aptly named the “Auto Cluster” and comprises areas of Chinchwad, Talegaon, and Chakan.
Beyond automobile manufacturing, Pune also saw the rise of several government and private companies producing a wide range of goods, from antibiotics to heavy industrial machinery. These industries eventually constituted the Maharashtra Industrial Development Corporation (MIDC) area on Pune’s outskirts, forming a robust industrial base.
The industrial boom generated demand for employment, which in turn attracted people to take advantage of skilled, semi-skilled and managerial employment opportunities. Areas like Pimpri and Chinchwad witnessed massive migration, leading to a substantial real estate development and upgradation of infrastructure. To manage the rapid growth, the Pimpri Chinchwad Municipal Corporation (PCMC) was established in 1982, bringing its industrial and residential areas under a unified civic body. From the 1960s to the early 2000s, it became a common trend for engineers graduating from the College of Engineering, Pune (COEP), to secure jobs in these burgeoning industries.
Features of Chakan’s Automotive Warehousing Landscape:
Pune’s Chakan area is often referred to as the “Detroit of India due to its strategic importance to the auto sector. Prominent manufacturers in the region include Mercedes-Benz, Volkswagen, Tata Motors, Mahindra, MAN Trucks, Jaguar, and Range Rover, among many others. Numerous ancillary industries whose functions revolve around these major manufacturers have expanded their production facilities throughout Pune as well. Some of these are Posco, Gabriel India, Behr India, Wheels India, Lear Corporation, Brose India, Faurecia, ZF India, and Rinder India. Also, a part of this ecosystem are key suppliers such as Benteler Automotive, Lumax Industries, Tata Autocomp and more.
In response to the demand for superior industrial and logistics parks’ infrastructure from automotive and auto component companies, the Chakan-Talegaon cluster has grown to become the largest industrial and logistics hub in the Maharashtra city and is characterised by pristine Grade A industrial warehouses. These automotive industrial warehouses could be built-to-suit to match specific operational requirement, or they can be ready-to-move in solutions.
It is not just the presence of prominent automotive companies in Chakan but also its advantageous location that leaves nothing more to be desired. Situated just 30 km from the Pune City and 28 km from the Pune Airport, Chakan offers excellent access to major transport routes, including the Mumbai-Pune National Highway (NH4) and the Pune-Nasik Highway. This connectivity extends to other key locations, with Pimpri Chinchwad Industrial Area only 20 km away, Mumbai 140 km, and the JNPT seaport a mere 110 km, facilitating smooth logistics and transportation.
In recent years, with a favourable government push, Chakan is becoming increasingly well-serviced. Leading telecommunication providers like MTNL, Reliance Infocomm, and Bharti Airtel ensure seamless digital connectivity, temporary water schemes and a permanent line from the Andra dam provides uninterrupted water supply, and a 12.5 MVA substation by MSEB ensures reliable power availability. Chakan’s roads have been planned to support heavy truck and container movements with new phases in the pipeline. Additionally, dedicated fire stations enhance Chakan’s safety and strict pollution norms maintain environmental standards.
Policy Push for Automotive and Manufacturing in Chakan
Recognising the automotive sector’s potential to boost exports and attract investments, the government has favourably lent its push to the growth of automotive and manufacturing in Chakan.
By improving the ease of doing business, automotive companies in Chakan enjoy streamlined regulatory processes, reduced bureaucratic hurdles, and incentives for setting up manufacturing units. These measures also encourage investment in Grade A industrial and logistics parks by institutional developers. The robust infrastructural development only adds to the location’s favourability because of it resulting in efficiency in logistics and supply chain operations. The “Make in India” initiative and the incentives for investments in the automotive sector—such as financial incentives, tax breaks, and subsidies to encourage companies to invest in advanced manufacturing facilities—encourages both Indian and multinational companies to conduct business within the country. Rounding it all is the government’s emphasis on the development of a skilled workforce to support the advanced manufacturing needs of the automotive industry. By fostering educational and vocational training programs, the state ensures a steady supply of skilled labour that is ready to meet the industry’s dynamic demands.
The government’s support extends to regulatory and compliance aspects, ensuring that manufacturing units in Chakan adhere to the highest quality and environmental standards, as well as to promotional support via endorsements and participation in public ceremonies which boost investor morale significantly.
Demand in Chakan Today
Chakan’s current dominance in Grade A industrial and logistics parks has been driven by robust leasing momentum and substantial demand from 3PL (third-party logistics), engineering, and manufacturing sectors—most of which overlap massively with automobile, parts, and components requirements that cater directly to the auto giants. According to a report by Cushman and Wakefield, in H2 2023, Pune saw a 1.48 million square feet warehouse lease transactions out of which Chakan accounted for 61.5%, showcasing a significant year-over-year rise. For the overall year, warehousing leasing in Pune reached a record 4.4 million square feet for 2023 (55% increase), out of which 57% of the total leasing volume was driven by 3PL. In industrial leasing, Pune recorded 8.3 million square feet – of these engineering and manufacturing firms made up 57.5% and automotive sector maintained a 20% share.
Chakan specifically saw a city-wide industrial rental growth of 9-14% with many more land transactions and development underway. Horizon Industrial Parks launched a new industrial and warehousing park in the phase five of Chakan in H1 2024, spanning 99 acres with a development potential of 2.2 million square feet.
