Ford Motor Co., Hyundai Motor Co, Nissan Motor Co., Renault SA, Daimler AG, BMW AG and other international car makers and suppliers are spending billions of dollars to make Chennai, now in many ways resembling Detroit area 2010, one of the world’s biggest hubs of small cars for export as well as for increasingly affluent Indians. Soon, the city will turn out close to 1.5 million vehicles a year, more than any one U.S. state made last year.

Car parts suppliers also are placing big bets on the city. Tyre company Michelin SA and window maker Saint-Gobain SA, both of France, are setting up some of their globally biggest factories in Chennai. Germany’s Daimler, meantime, is building a multimillion-dollar test track.

All the investment has generated jobs for more than 200,000 people and accounts for 12% of the economic output of the state of Tamil Nadu. The kind of manufacturing being done here is what India needs to bridge the gap between its agricultural workforce, which makes up 60% of its population, and high-end services industries, such as outsourcing, that employ relatively few.

Hyundai has invested $2 billion here. It is not only cheap factory-floor labour that attracted the South Korean company, but also an abundance of low-wage engineers to programme the robots that help churn out vehicles.

Ford has invested close to $1 billion, deploying production-line technology it doesn’t even use in the U.S., including car-painting robots and a deep-water testing pool to ensure cars won’t leak during monsoon floods.

Michael Boneham, the Chennai-based managing director of Ford’s India operations, said the educated labour, a consistent industrial policy, access to a port and government financial incentives, all played a role in luring the U.S. car maker to the city.

The State of Tamil Nadu has been better than most Indian jurisdictions at providing the land, roads and electricity that the car industry needs. It also set up a single office for them to obtain the dozens of government approvals and licences required to start or expand a business. And when the local government ruling parties change, auto executives said, they noticed no change in how they were treated.

The influx of foreigners and foreign money is altering this historic city. In the largely vegetarian region there is little meat for sale. But the Seoul Restaurant is packed with Korean families grilling beef at their tables.

The student population at the Chennai American School has quadrupled to close to 800 as new pupils have arrived from the U.S., Japan, Europe and Korea. A sprawling amusement park across the street from the Hyundai factory, a French bakery, evangelical Korean churches and Japanese grocery stores have popped up in recent years.

New malls and apartments are being built to serve the growing middle class of auto workers. The state’s technical institutes, known for producing computer programmers and engineers, are switching focus to skills useful at car companies.

The growth of the car industry hasn’t been without problems. Hyundai unions have staged several strikes to demand better treatment of workers, traffic has become more congested and rents in some of the best neighbourhoods are now out of reach of the average Indian. But Chennai’s production capacity is set to rise even further.