Chrysler drives into India with BPO

It's long been one of Detroit's Big 3 (along with General Motors and Ford). Lee Iacocca became a business icon after he successfully helmed a major turnaround by the company. The brands owned by it include the legendary Plymouth, Dodge and the original Jeep. And now, it's driving into the India's ITeS (information technology-enabled services) sector .

According to people close to the development, Chrysler is setting up an 80,000 sq ft ITeS operation in RMZ Millenia IT park in south Chennai. Once it is up and running, it will be the first operation of Chrysler in India. The exact nature of the proposed centre's operations is still not clear, but it is expected to strengthen Chennai's claim of being among the best locations for automobiles-related ITeS globally.

"We have been told that Chrysler's call centre operations would be for their customers. They have initially taken 20,000 square feet and have signed agreements to take another 60,000 square feet. Their operations alone would attract 800 staffers," official sources at RMZ Millenia Park told TOI.

The centre would do work both for Chrysler Motors as well as Chrysler Financial, sources added.

Besides, oil giant Shell has taken up one lakh square feet in the same park for its captive BPO operations. Construction equipment major Caterpillar too is doubling its presence in the city by taking up a further one lakh square feet which will be used for design and logistics services.

Among the other big ticket real estate deals, Satyam has signed up a four lakh square feet space in Shriram Group's Gateway in Perungulathur. Logica and Citigroup too have signed up for 1.40 lakh and 1.50 lakh square feet respectively for their Chennai operations. They will start operations from DLF Park near Porur.

"All these deals have crossed the LoI and MoU stage and have either been signed or are on the verge of being signed,' sources added.

Industry sources said the first three months of the current year saw around 1.50 million square feet of space being absorbed. During the corresponding period last year, 2.16 m sq ft of space were leased out. The main reasons for the drop in activity are non-clarity on tax benefits for STPI units, oversupply and the effect of the rupee's apprecation against the dollar on smaller software companies.

"There has been a fall in occupancy levels, but not as much as we thought it would be. For the whole of this year, we expect some 6.50 million square feet of IT space and 0.30 million square feet of non-IT space to be absorbed," said R Rajesh Babu, chief consultant, RECS Group.

On the rentals side, there has been a drop of 25 to 30% in the past year. "The region beyond Perungudi, which is where the IT Corridor starts, saw deals getting signed at Rs 32 a square foot this quarter as against Rs 38 a year ago," said Tirumal Govindarajan of CBRE, a leading real estate consultant.

Most of the investments in this space by Information Technology companies were getting delayed as the fate of tax benefits for software companies was not known. With the government clarifying on Friday that the rebate would continue for one more year, a definite trend is expected to emerge in the forthcoming quarters.

Chrysler drives into India with BPO-India Business-Business-The Times of India