Interview with Harish Sheth

Chairman & Managing Director, Setco Automotive Ltd

Date: 29 Mar 2015 | Author: P.Tharyan

Report: P.Tharyan, Photography: Mohd. Nasir

Can you very briefly tell me a about your company, your products and your customer profile etc?

We basically manufacture clutches for medium and heavy duty vehicles. We have been concentrating on this area. Recently we introduced clutches for light commercial vehicles. In the long run we are looking at making clutches for tractors also. My factories are located in Baroda in Gujarat and in Uttarakhand.  Our major customers are commercial vehicle manufacturers including Tata Motors, Ashok Leyland, Daimler (Bharat Benz), Eicher, AMW, MAN. All vehicle manufacturers in the country are our customers.

Do you have a technical collaboration for making clutches?

Earlier we had a technical collaborator when we forayed into commercial vehicles. This started in the year 2000 when Indian vehicle manufacturers in order to upgrade their engines to meet the new emission norms, started importing clutches. Tata Motors started this by importing clutches. We with our UK based collaborator, part of Dana Corporation, indigenised the clutch in 2001-02. And subsequently what Tata was importing, we started manufacturing in India. In 2005-06 Dena decided to divest their UK subsidiary. We bought that company. So as such we do not have a technical collaboration, but we have an R&D centre in UK and an equally strong R&D centre in India.

The Indian commercial vehicles segment saw a gloomy period recently, did that have an impact on your business?

As far the OEs are concerned, the demand is slowly picking up this year. As far as the aftermarket was concerned, the demand was always there. A clutch typically has one life with the OE but at least four lives with the aftermarket. Clutch is something that is changed every two to three years, depending on the usage. We have also developed clutches for the export market. That is also paying dividend for us.

Coming to clutches for the export market, are these different in any form with regards to build and quality?

No, they are not. Each clutch is designed to suit a vehicle, not necessarily a vehicle manufacturer. It depends on the torque, engine etc. They may remain same for the same application, but in India most of the vehicle manufacturers do not have that big an engine going into 500 hp and 600hp. We have to design clutches for that.

What is the turnover your company has achieved?

We are looking at something around Rs 400 to Rs 500 crore this year. The major chunk of this revenue will come from the aftermarket. In our line of business the larger share of business must come from the aftermarket. OE could be around 30-35pc, exports around 10pc and the remaining 55pc from aftermarket.  In the aftermarket we sell directly to consumers as well as through the distribution network of Tata Motors and Ashok Leyland.

What are you expectations from the Automechanika show and what is it that you are displaying here?

We are displaying our capabilities here and our new products. It is a place where we meet people. Unlike last time there could be a lot of OE visitors. Most senior OE people do not have time to visit your factory so here it is simpler to see your range. We also participate in the shows in Hanover and Frankfurt also. Today in India, in the OE segment, nine out of ten trucks are fitted with our clutch. We have around 85pc to 90 pc of the OE market.

How will you describe the Automechanika New Delhi show as compared to similar shows held abroad?

You cannot compare this show to the one in Germany. It has been around for a long, long time. But we are getting there, our shows are good, they are well organised.

How does the future look like when it comes to the clutch business?

The OE business which was there in 2011-12, which went down to below 30pc of that in terms of numbers, we can now expect growth to happen. The minute you have infrastructure, power, mines etc, the growth in commercial vehicles will be stupendous. Basically this line is linked to GDP growth. We in India are looking forward to good GDP growth in the coming years. Then the future in commercial vehicle OE as well as aftermarket becomes good. We are continuously expanding our capacities. We have a plant in the UK and the US which we use to service our customers there. But again, overseas if we see an opportunity, we shall be open to it in terms of acquisition.

 

 

 

 


Tags ACMA Automechanika trade show auto show auto components


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