Setco Auto Systems, established in 1982, has grown into a premier manufacturer of high-quality clutch products and related automotive components in India. The company has firmly positioned itself as a key player in the commercial vehicle industry, offering a comprehensive range of products including clutches, flywheels, brake linings, clutch release bearings, center support bearings, lubricants, and universal joints. Over the years, Setco has expanded its portfolio through its subsidiary, Setco Allied Products (SAP), which provides a wider range of automotive components, including clutch bearings, lubricants, brake linings, and flywheels.
Recognizing the evolving needs of the market, Setco Auto Systems has also made a strategic entry into the agricultural sector. The company has introduced dual clutches for tractors, aiming to enhance operational efficiency and productivity in the agricultural landscape. This diversification highlights Setco’s commitment to innovation and its ability to adapt to industry trends, ensuring that its products cater to a broad spectrum of vehicular requirements.
In a recent conversation with Bus Coach India Magazine, Dr. Neeraj Kumar Singhal, the CEO of Setco Auto Systems, shed light on the company’s vision for the next few years. He emphasized that Setco Auto Systems is on a path of sustained growth and technological advancement. The company is deeply focused on strengthening its position in the commercial vehicle segment while simultaneously exploring new opportunities in allied industries. With a keen emphasis on research and development, Setco aims to introduce next-generation clutch systems that improve vehicle performance, fuel efficiency, and durability.
Q: Could you share an overview of SETCO’s current product portfolio and its presence in the Indian market?
We are from the automotive fraternity and are associated with all major Original Equipment Manufacturers (OEMs) in India and abroad. This Bharat Mobility Global expo is specifically for the automobile industry, showcasing various technologies and products available in the Indian market. It also provides an opportunity for international visitors to understand India’s growth in this sector. Our company has been in India for almost 20 years, manufacturing commercial vehicle clutches. We have participated in this expo almost every time, except for one or two occasions. It provides us with an excellent platform for interaction, allowing us to understand new industry trends while showcasing our own products.
Our product range, currently showcased at the Bharat Mobility Global Expo, includes both our existing clutch offerings and upcoming developments that are tailored to meet customer needs and evolving market demands.
Beyond commercial vehicle clutches, we have also made significant strides in the farm tractor sector. Clutches designed specifically for tractors represent a key part of our business, and we are proud to display these products alongside our commercial vehicle clutches to highlight the breadth of our offerings.
Additionally, we have a premium range of aftermarket products that go beyond clutches. These include loops, flywheels, brake linings, UJ cross, center release bearings, and more. While these elite products are not manufactured directly by us, we ensure that they meet our stringent quality control standards by sourcing them from reputable suppliers. Every product undergoes a thorough inspection before being dispatched, reaffirming our commitment to quality and reliability.
Q: You mentioned partnerships with OEMs. Which major OEMs are you currently working with?
Tata Motors is our biggest customer, contributing more than 70% of our revenue, with an 85% share of business (SOB) in their trucks. Our clutches are present in all Tata trucks. Ashok Leyland contributes around 15% of our revenue. We also have 100% market share with Daimler India Commercial Vehicles (DICV) in their 433.95 model. Additionally, we work with Volvo Eicher, Mahindra & Mahindra, and other major truck manufacturers in India. Essentially, Setco clutches are present in almost all major truck brands in India.
Q: You mentioned an increase in demand for automatic clutches. Can you elaborate on the future of automatic clutches in India?
Currently, around 30% of passenger cars in India have automatic transmissions, but automatic transmissions in trucks are still rare due to higher costs and additional drivetrain modifications. India will likely adopt automatic clutches within the next five to ten years. However, we are already participating in development and trials. For instance, we developed the 430 mm clutch a decade ago, initially supplying small quantities, and now it is in mass production. Similarly, for automatic clutches, we are investing in development at a lower scale so that when the market transitions, we will be prepared.
Q: What are some of the major challenges SETCO faces in the market? Additionally, what opportunities are you looking to explore?
SETCO has a strong and well-established brand presence, synonymous with high-quality clutches. However, like any business, we have faced our share of challenges.
One of the major hurdles we encountered was maintaining our market share after a two-year absence due to financial constraints. During this period, several new players, including local and unorganized manufacturers, entered the market. These companies offer lower-cost products, often at the expense of quality, making price competition a challenge for us.
Despite these obstacles, we see a significant opportunity to reclaim our aftermarket share. Previously, we held a 31% market share in the aftermarket segment, but this has now reduced to 18%. Our focus is on regaining this lost ground through aggressive market strategies, quality assurance, and stronger customer engagement.
Furthermore, with the rise of alternative fuel vehicles such as CNG and hydrogen-powered trucks, the relevance of clutches remains intact. Clutches continue to play a critical role in these vehicles, and we are already supplying clutches for these emerging vehicle types. This positions us well for future growth as the industry evolves.
Q: What is the current production capacity of clutch bearings and clutches at SETCO?
Currently, our manufacturing capacity stands at approximately two lakh clutches per month. At present, we are producing around 60,000 clutches per month across various segments, including OEMs, aftermarket, and exports. Our operations are supported by two manufacturing facilities, one located in Gujarat near Vadodara and another in Uttarakhand.
Our total annual production capacity is approximately 25 lakh clutches, but we are currently utilizing around 8 lakh per annum. This means we are operating at about 35% of our total capacity. As we continue to recover lost market share and expand into new segments, we anticipate increasing our production volume significantly in the coming years.
Q: R&D and innovation seem to be at the heart of your company’s growth. How do you see India evolving as a global leader, not just in manufacturing but also in innovation?
We strongly believe that innovation is the key to long-term success. We are expanding our R&D efforts into safety technology, one key area being the prevention of drunk driving. There are technologies available today that can help prevent accidents caused by intoxicated drivers, and we are working towards integrating such solutions to make our roads safer.
At this Expo alone, we see thousands of manufacturers bringing forward new innovations—whether it’s something as simple as a smart helmet that solves practical problems for riders or other creative solutions tailored for the Indian market. India is not only evolving as a global manufacturing hub but also as an innovation powerhouse. The emphasis on technology and smart solutions is positioning the country as a leader in the automotive and mobility sector.
Q: What are SETCO’s investment and technological advancement plans?
While our manufacturing facilities already have the required capacity, we are committed to continuous technological advancements. This year, we have made significant strides in modernizing our production processes. We have upgraded our four production lines to be IoT-compliant, integrating Industry 4.2 standards.
Additionally, we are focusing on low-cost automation to enhance productivity and operational efficiency while reducing worker fatigue. Over the last two years, we have successfully improved productivity across our plants by 25%. This means that without increasing our workforce, we have managed to produce 25% more units, demonstrating the impact of our technological upgrades and process improvements.
Q: Given the rise of electric vehicles (EVs), how does SETCO see its future in the industry?
The rise of EVs is a major industry shift, but we do not see it as an immediate threat to our business in the truck segment. Indian fleet operators often overload their vehicles, and the added weight of EV batteries could pose a limitation. As a result, electric trucks are expected to be used primarily for auxiliary functions such as air conditioning rather than core transportation.
Additionally, alternative fuel vehicles such as CNG and hydrogen-powered trucks continue to require clutches. We are already supplying clutches for CNG-powered Tata Motors and Ashok Leyland models, and we expect this segment to grow as more companies explore sustainable fuel alternatives.
Q: Lastly, is there any message you would like to share with your customers and stakeholders?
Our primary goal is to regain our lost market share in the aftermarket segment. During our temporary absence from the market, numerous unorganized players entered, offering lower-quality products at lower prices. Our challenge is to re-establish our presence while maintaining the superior quality that SETCO is known for.
We remain dedicated to innovation, efficiency, and excellence. With our strong brand recognition and commitment to quality, we are confident that we will reclaim our leadership position in the industry. Our focus is on delivering value to our customers, ensuring that our products continue to meet the highest performance and reliability standards.