The government in the western Indian state of Gujarat is aiming to make he state a leader in the auto industry in the country.

According to some estimates, about half the installed capacity for producing cars in India could be located in the state in the next three to five years. By 2015-16, about a third of the cars that is produced in the country could be from the state.

The Sanand-Mehsana hub in the state has emerged from nothing in the last few years. Earlier the auto sector was dominated by the Pune-Chakan-Aurangabad belt of Maharashtra, the Chennai hinterland of Tamil Nadu and the Gurgaon-Manesar belt in Haryana.

Maruti Suzuki, Peugeot PSA, Ford India and Kia Motorsas well as Tata motors and General Motors either already have or in planning states to have a presence in the state. The state government led by Narendra Modi is now planning to increase capacity to make nearly three million cars per annum from 2014.

Analysts say that the state will be able to achieve an installed capacity of 3 million units in the next three years, accounting or about a third in the country. The auto industry expects total car sales would be 4.5-5 million by financial year 2015-16. The total investment of these new projects is estimated at more than Rs 26,000 crore and this does not include the projects that are still in planning states.