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Setco: managed to pull through by focusing on product development

“The automotive industry has a long-term horizon through careful initiatives and measures that are being taken to curb the falling sales.”
– Harish Sheth, CMD, Setco Automotive Ltd.
Harish Sheth talks how introduction of new products, entry into newer markets, and exports and aftermarket helped Setco perform above average.
Auto industry in coming daysUncertainties in global markets and inflationary trends coupled with higher interest cost are slowing down of Indian economy, especially in manufacturing and mining sector. Lower GDP also has affected the consumer sentiment as well as market demand.
The bumpy economic climate has forced the sale of automotive products to drop drastically in the last few months. This could be due to a number of reasons like heavy taxes, roundabout policies, changing middle class and so on. However, the automotive industry has a long-term horizon through careful initiatives and measures that are being taken to curb the falling sales. The real upward push will come only from higher GDP and positive economic sentiment.
The auto industry world wasn’t doing very well and has seen difficulties but there are opportunities. Both exports and aftermarket will play an important role in helping the auto industry grow faster.
Setco in 2012Considering the auto industry, Setco has done reasonably well in the last one year. The company has managed to retain its market share though its aftermarket and exports division. It managed to pull through by focusing on product development and broadening its target markets. Its endeavor has been to constantly introduce new products in the current economic slowdown. Setco is very positive about its future in the industry.Performing above averageIn order to perform well in the industry, Setco focused on protecting top line to sustain level of productivity. Introduction of new customers, new products, and entry into newer markets were some of the initiatives along with exports and aftermarket helped the company perform above average.
Strategies to float at difficult timesCost control, better quality, introducing new products and thrust in the export market delivery at lower cost are the best possible means to tide over difficult times and protect margins. Accordingly, Setco has been focusing on vendor and component development as well as wider product range to capitalise on its technical expertise.
Its focus has always been on new product development and on expansion and modernisation of capacity and last year, though not very good in business terms, was no exception. The company has set up state-of-the- art R&D centre at Kalol which will be fully functional very soon. It has been concentrating on expanding its reach in international markets which has a large potential. Setco is also in talks with some global players to meet its demand in domestic market as well as internationally. For this, the company has plans to invest around ` 75 crore on expansion and modernisation of production facilities. It also has taken some backward integration initiatives over next couple of years.
India as export hubIndia’s share in the global auto component industry is just 2.6 per cent. If interest rates and thrust on infrastructure reduce, there will be enough demand for manufacturing in GDP to 25 per cent from 15 per cent. India has a huge potential to be the export hub.

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