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CLUTCH AUTO LIMITED
ANNUAL REPORT 2004-2005
CHAIRMAN'S REPORT
Clutch Auto started as a tiny scale unit in 1970 and became a private
limited company in 1971. It registered a 100% compound growth rate in the
first decade of its existence. Original Equipment (OE) orders for Clutch
for Nissan & Shaktiman defence vehicles during 1972-73 and Tata vehicles in
1974 set the tone for its products and it required brand leadership in the
Industry, which it has since maintained.'
Apart from the period from 1985 to 1992, when Clutch Auto had technical
support from AISIN Seiki, Japan, for its clutches meant for Maruti Udyog
and DCM-Toyota, it has been and continues to be a standalone company with
its own technology base.
After a five year period (1998-1999 to 2002-03) of restructuring, wherein
an investment to the tune of Rs.31.10 M was made in fixed assets including
online testing equipment, metallurgical & balancing equipment worth
Rs.16.20 m. Investments in tools and dies Rs.91.5 M, development of samples
and prototypes Rs.70.7 m, product launch Rs. 41.9 m, patents and trademarks
registration Rs.4.4 M, totaling Rs.208.5 M were made. Out of 19 new
products developed under a project approved by Technology Development Board
(TDB), 5 products were launched in the USA-in 2001 with assistance of India
Brand Equity Fund (IBEF), Ministry of Commerce, Govt. of India, 8 new
products were developed with assistance of ICICI Bank under a world Bank
aided programme. These included 8 items exclusively for US Heavy Duty Truck
market, 6 for Domestic Medium/Heavy 'Truck market' 13 for Tractors
including one for Exports and one for a Passenger Car.
After rigorous testing in various operating conditions a major breakthrough
was achieved during 2004, when Clutch Auto was nominated as the first
Indian company to enter into single step Heavy Duty distribution network
by, Fleet Pride, the biggest HDD (Heavy Duty Distributor) in, USA with 200
outlets and 5 warehouses.
Clutch Auto's customer profile includes top rebuilders leading supply chain
distributors, heavy duty Clutch manufacturers and big aftermarket Clutch
distributors in Canada and Central, South American and Carribean based
dominant transmission manufacturers.
Clutch Auto Limited enjoys the distinction of being the only standalone
company in the Original Equipment market in the world besides 6 major (3 in
Europe, 2 in Japan and One in USA) and the only offshore company to have
successfully entered the American class 7-8 Truck market in competition
with one dominant supplier in OE segment and 2 aftermarket suppliers. This
opens up vast opportunities to the Company in export which are now targeted
to constitute = 50% of its overall annual turnover during the next five
years. Having placed itself strategically in all market segments of this
lucrative market, the Company now aims at is own structured distribution
and service network to support the potential customer base. IPR portfolio
presents a strong future for company's products which offer better
engineering solutions and include a Self Aligning Clutch 'Whisper' - the
Wear Indicator series and Low Pedal Effort 'Ez N Life' besides predamped
High Torque Clutch Discs & 'Cool Clutches'. Clutch Auto has excellent
research laboratories and manufacturing capabilities to develop futuristic
products as may come in its way.
Increased service life of different products on domestic and American
trucks has been-established with interchangeability and retrofittability,
unit-to-unit and component to component, thus carving out an exclusive
market segment for new developments made by the Company. It's dedicated
staff and engineers of the company enable it to work forward with
confidence to emerge as a niche player in Heavy Duty clutch market
worldwide.
Increasing emphasis on productivity improvement, and optimization of
resources in the supply chain with on-going vertical integration are likely
to have a positive bearing on Company's prospects in the medium and long
terms.
During its 5 year preparatory phase of transformation even though exports
and domestic sales have shown a downward trend, still company has continued
to concentrate on development and testing of, new products and creation of
its own Testing, Certification, simulation and Demonstration Capability
topped with NVH Drive line solutions through design of clutches have placed
Cluch Auto in a pre-eminent position against stiff competition from MNC's
both? in the country and overseas markets experience thus gained and in-
house Test & Development capabilities would be invaluable while exploring
new opportunities in global market.
We are sure, dear shareholders, you support the decision of the Company to
stand alone and define its own future which though bold and difficult but
which has eventually paid rich dividends so that your Company has emerged
as a long term player with a rightful place amongst the manufacturers of
heavy duty clutches in the world.
K.S. Bhatnagar
Chairman
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