CALCUTTA, Aug 11: Clutch Auto Ltd, the Faridabad-based clutch product manufacturer, has decided to cater to the needs of foreign carmakers in the country without joining hands with any multinational.

Clutch Auto had extensive talks with Valeo of France and Fitchel and Sachs of Germany for possible joint ventures. However, when all talks failed, the company decided to go it alone. Vice-chairman and managing director Vijay Mehta said initially the management opted for a foreign tie-up. "We were trying desperately to go for an alliance with a global partner for quite some time but all our negotiations with the foreign majors failed because they wanted to dictate terms. So we decided to take them on single-handedly," he said.

Mehta said that global giants like Ceekay Daikin, LuK GmbH, Rico and others are about to enter the Indian clutch market and Clutch Auto is gearing up to meet the challenges ahead. "We have registered a 100 per cent annual growth rate in the last ten years, after being incorporated in 1971. In 1996-97, we recorded a 30 per cent increase in our turnover over the previous year from Rs 46.15 crore to Rs 59.88 crore. Gross profit went up by 25 per cent from Rs 3.10 crore to Rs 3.85 crore and profit before tax went up by 21 per cent from Rs 2.28 crore to Rs 2.75 crore. However, net profit dropped by 5 per cent from Rs 2.27 crore to Rs 2.15 crore, after keeping a provision of Rs 59.60 lakh for income tax," Mehta said.

Vijay Mehta along with his associates hold about 45 per cent stake in Clutch Auto. Financial institutions hold 5 per cent, about 0.4 per is held by non-resident Indians and the rest, more than 49 per cent, is with the public. Clutch Auto has recently received orders from General Motors of the US as the original equipment manufacturer (OEM) for designing and developing 7.8 litre industrial engine clutch. The company will meet General Motors' requirement of these type of pumps for the next three years. Mehta said enquiries from various GM subsidiaries and other foreign car manufacturers are pouring in. "The recent approval has generated enquiries from General Motors of Holden, Australia, General Motors of Mexico and General Motors of Brazil. Negotiations are in an advanced stage. We are also in talks with the Volkswagen of Germany for supply of clutches for a lower end car to be introduced in 1999," Mehta said.

The company is already an OEM for all models of Telco, Maruti Suzuki, Ashok Leyland and Mahindra & Mahindra.

It is also the sole supplier of clutches to the Indian defence establishments for tanks, Komatsu range of earthmoving equipment and infantry combat vehicles. The original equipment manufacturer market accounts for 40 per cent of its sales, the secondary market for 30 per cent, exports for 18 per cent and state government transport and defence establishments for the rest.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.