Case Study on Clutch Auto

In: Social Issues

Submitted By matherelahi
Words 1744
Pages 7
Company Background
Clutch Auto, established in 1971, is India's largest clutch manufacturer and exporter with over threedecades of undisputed leadership. Its production facility is located at Faridabad. The company enjoys over60% market share in tractors and commercial vehicles (CVs). Its clientele includes Tata Motors, AshokLeyland, Maruti Udyog, Mahindra & Mahindra, Bajaj Auto, TAFE, Toyota, BEML, Escorts and State-runtransport undertakings. In CVs, it is a major supplier to Tata Motors with a 60% market share. It hasdominant market share of 80% in tractors and supplies to all manufacturers in India.
CAL is growing both organically and inorganically. In FY05, it expanded clutch plate capacity by 122% to2 millions pieces and trebled clutch cover capacity to 1.5 millions pieces at capital expenditure (capex) ofover Rs 5 crore. It acquired the clutch division of Pioneer Inc, US, in March 2006, which was renamedPioneer Clutch Inc.
Thrust on exports
CAL is targeting the US heavy-duty clutch market (estimated at $550 million) with its patented products.The acquisition of the clutch division of Pioneer Inc will strengthen its foothold in the US. Pioneer is aquasi manufacturing and distribution company in the US with a warehouse facility of over 55,000 squarefeet, access to 7 warehouses, 20 marketing networks, sales force of over 100 people, and most importantlya client base of 500 companies in the replacement market. Pioneer's established distribution would helpCAL acquire the formers' clients.
The company has bagged a five-year order worth US$60 million from Fleet Pride, which should further aidits export growth. Fleet Pride's established network would also enable CAL tap the formers' clients. Weexpect export revenues to grow at a CAGR (FY06-08) of 78.8% to Rs 153.6 crore in FY08
Product patents - a competitive advantage
CAL manufactures 500 different types…...

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