Setco Auto forms venture with German co FTE

Mumbai: Leading domestic clutch manufacturers, Mumbai-based Setco Automotive Ltd has entered into a 51:49 joint venture with FTE Automotive, Germany.

The joint venture is to make hydraulic clutch actuation systems and components for passenger cars and commercial vehicles. The agreements were signed and papers were exchanged between Mr Harish Sheth, Chairman and Managing Director, Setco Automotive Ltd, and Mr Klaus Glocker CEO, FTE Automotive, on Monday.

FTE Automotive is a global leader in making hydraulic brake and clutch systems for passenger cars and commercial vehicles, with more than 50 per cent global market share.

The joint venture company, FTE Setco Automotive is planning to set up a factory either in Maharashtra or in Kalol in Panchmahal district in Gujarat, near the existing factory of Setco. The joint venture company’s production unit will be operational in the coming months. “We will invest Rs 60 crore in two years and we are expecting a turnover of a few hundred crores over a period of five years,” said Mr Harish Sheth.

Setco is the largest manufacturer of clutches for heavy and medium commercial vehicles in India. The company has a customer base which includes major truck makers Tata Motors, Ashok Leyland and Eicher Motors. Setco has strategic global footprint with four manufacturing facilities globally, two in India, and one each in UK and US.

“In India there is no manufacturer of clutch actuation system. This is a virgin market and there will be considerable growth. The auto manufacturers in India are looking for robust and advanced technology and a lot of global carmakers are coming to India. Therefore, we see a huge potential here,” Mr Sheth said. He expressed confidence that the company could start supplying clutch actuation systems this year itself. “Our existing clients Tata Motors and Ashok Leyland have shown interest in this,” he said.

FTE, with a client base including Audi, Ford, Volkswagen, Mercedes-Benz, BMW, GM, Hyundai, Volvo, Skoda and Suzuki, supplies clutch actuation systems with parts made of plastic and aluminium.

“We have replaced actuation systems made of cast iron by the ones made of plastic and aluminium in Europe 20 years ago. We are now introducing them to India. Plastic-made clutch actuation system makes a vehicle two kilograms lighter and thereby contributes to the total emission reduction in a big way,” said Mr Ian Elliot, Director Business Strategy and Cooperation, FTE Automotive.

Mr Glocker said: “Indian companies are going global and a lot of our global clients are also entering India. Hence, partnering with Setco is definitely an attractive investment in the future.”