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Since the economic liberalisation in 1991, Tamil Nadu's capital Chennai has become one of the major destinations for investments by the world's leading automobile majors.
Today, seven of the 20 top global auto makers are located in and around Chennai, sometimes referred to as the 'Detroit of India'.
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It is easy to see why auto companies, like Hyundai, loved setting up shop in TN.
The state's blend of financial incentives, stable industrial policy, a consistent stream of skilled and disciplined labour, proximity to a port, good infrastructure and abundance of power, make Chennai, an attractive location for a production hub.
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And yet, dark clouds threaten to bring that smooth ride to an end.
Not only are new automakers choosing Gujarat over TN, but erstwhile mainstays of the auto scene in Chennai have also decided to move.
Just recently, French car maker Peugeot announced that Gujarat, not TN, is a front runner for a Rs 4,000 crore (Rs 40 billion) plant that the Peugeot plans on setting up soon.
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More worryingly, Ford which established its first factory in India at Maraimalai Nagar, near Chennai in 1996, announced a few weeks ago that its second facility - a Rs 4,000 crore (Rs 40 billion) investment with an initial installed capacity of 240,000 units annually - will be set up in Gujarat, not Tamil Nadu.
Ford said it selected Gujarat because of the state's pro-business environment.
"Gujarat is a classic example of what works. It is run in a professional way. No bureaucrats hurdles at all, no electricity, water and connectivity problems and incentives are also high.
Somehow Tamil Nadu is missing these and has become more bureaucratic," says R Dayal, executive officer, Maruti Suzuki Pvt Ltd.
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The only ones now left in TN are automakers Hyundai, which followed Ford to Chennai in 1996, as well as BMW, Mitsubishi and Renault-Nissan. Could these automakers be next in line to move?
A quick scan of the power situation in TN makes moving a no-brainer. Today power shortage in the state is around 2800-3000 mega watt (MW) - which mainly affects industry, not households.
However, OEMs are not directly affected since the government has ensured secondary connections from alternate grids to automakers in the event of load shedding.
The real problem with a power shortage lies in the fact that the car manufacturing process is largely the assembling of components procured from either ancillaries or component manufacturers - a domestic industry worth an estimated $30 billion today, of which Tamil Nadu comprises 30 per cent.
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Car makers outsource almost 80 per cent of the components as this helps in keeping the capital cost low.
The industrial estates in and around Chennai, Coimbatore and Hosur abound in auto ancillaries and when they lose power, OEMs also bleed.
Srivats Ram, president, Auto Components Manufacturers Association (ACMA) and managing director, Wheels India Ltd, a TVS Group company said that cost of labour, power and fuel had essentially almost doubled in TN over the last three years.
Component makers end up paying around Rs 12-13 for a unit of power due to usage of generators versus Rs 4-6 for grid power.
"Since their profits have completely eroded, they are not investing in R&D and in expansions, which results in OEMs facing a shortage in components," says K V Kanakambaram, president, Industrial Estate Manufacturer's Association.
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Chennai produces practically everything that moves - from bicycles to battle tanks and everything in between, including motorcycles, cars, tractors, earth-moving equipment, trucks and even rail road coaches - so it's no surprise that auto manufacturing was able to thrive.
"My vision is to make Chennai the World's largest auto cluster," said Chief Minister Jayalalithaa, who paved the way for international auto majors in 1991, by getting US car manufacturer Ford to invest in the state in 1995 amid stiff competition from other states including Gujarat.
Ford set up its facility at Maraimalainagar, 45 km South of Chennai, and invested about $1bn in a plant that has a production capacity of 200,000 cars and 250,000 engines.
At present, 85 per cent of the vehicles are sold in the domestic market.
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Last year, the company shipped its first 'Made in India' Figo to South Africa and plans to expand exports to include 48 countries including North Africa, Mexico, South America, Arab Emirates and West Asia.
Last year was a good year for the state.
According to its estimate, over $3 billion (around Rs 13,800 crore) was invested in Chennai by the car manufacturers by end of 2010. It is a vital industry for TN, employing about 2.5 lakh people.
Total installed capacity in and around Chennai is 12.8 lakh cars every year, making Chennai one of Top 10 centres in the world for car manufacturing.
In 2010 alone, more than one million cars were produced in Chennai, with a third of them exported to Asia, Africa and Europe.
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"Every third car produced in India is from Chennai or around it. The area makes three cars every minute and one commercial vehicle every 75 seconds.
The state has a capacity of 350,000 commercial vehicles each year," says a senior official from the industries department.
On the commercial vehicle side, besides Ashok Leyland, the state houses Daimler, Caparo, Komatsu, Doosan and Caterpillar.
Manufacturing in this region started in 1840, with Simpsons pioneering India's automobile industry including making rail coaches and diesel engines.
However, all of this storied history as well as recent accomplishments now stand imperiled.
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The lack of power isn't the only problem crippling TN's auto industry. Labour problems threaten to sink it as well.
At Hyundai Motor India, subsidiary of the South Korean auto maker, workers went on a 18-day strike at the end of April to demand recognition of the employees' union.
The then company spokesperson came on record and said the company is moving in 20 productions to its Turkey plant, to cater to European markets.
Tire maker MRF has experienced a debilitating strike - the Arakkonam (TN) unit was closed for 185 days in 2009, the company has said, causing a loss of around Rs 1,000 crore (Rs 10 billion).
The main problem was rival unions clamouring for recognition. Its workers have subsequently gone on strike again in October 2010 as well as June 2011.
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According to A Paramasivam, Union leader at MRF, these are often due to the more taxing nature of jobs involved in the sector compared to others.
Problems also occur due to wage disparities between contract and permanent workers and reluctance of companies to regularise casual workers - used often by car companies to keep costs low - and recognise the Unions.
A mechanism to measure corporate governance practices in automobile companies is required in order to avoid frequent labour unrest in the state.
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Two major industrial estates - Guindy and Ambattur - in Chennai, have lost business worth over Rs 1,000 crore due to shortage of labour and power.
K V Kanakambaram, president, Industrial Estate Manufacturers' Association said, engineering and automobile contributes only 30 per cent of the total Guindy Estate's turnover, which used to be 100 per cent till 5-6 years back.
Scheduled power cut in the Estate is 2 hours and unscheduled is around 2.5-3 hours. This brought down the production by 50 per cent.
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Finally, it is ironic that a policy that was once a strength in Tamil Nadu has become a weakness.
Real estate pricing according to industry experts is killing the industry. Prices are now 200 per cent higher in TN. Even just setting up costs, sans the land price, is 30-40 per cent higher.
"Remember if an OEM is investing Rs 1, rest of the people in the chain including suppliers invests Rs 4," the expert points out.
This is ironic considering that the state government had steadily accumulated a land bank through state industrial promotional agencies over the years to prevent this problem - and that too in a manner that avoided the conflict with farmers like Singur in West Bengal.
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Can TN soothe the growing apprehension of automakers about setting up factories in the state?
"Times are tough and commitment from the government is necessary to restore the state to its previous position," says R Sethuraman, senior Vice-President - Finance, Hyundai Motor India.
Unless the state government acts quickly, Tamil Nadu risks losing its pride, customers like Hyundai and its position as India's premier auto hub.