Sabohema banks on rising demand for comfortable commercial vehicles
Set up as a joint venture between Hema Group of Industries and Roberto Nuti SpA, Italy, in 2010, Sabohema Automotive is banking on the rising comfort quotient in Indian commercial vehicles to offer international solutions that have been optimised for application in India. Established as a joint venture with each partner having an equal stake, Sabohema specialises in manufacturing shock absorbers and air bellows for light, medium and heavy commercial vehicles. Catering to the bus and trailer market as well, the company is leveraging the European experience and expertise of Roberto Nuti to expand its product range, and the number of clients. A one-stop shop until recently for Eicher Polaris, Sabohema is about to start serving Daimler India Commercial Vehicles and Ashok Leyland by supplying shock absorbers to their commercial vehicles.
According to SN Ahmed, CEO, Sabohema Automotive, the shock absorbers will find use in 40-49-tonne trucks. “We will also supply cabin dampers and lift axle shock absorbers to Ashok Leyland (3718 and 3118)”. Claiming to gain good traction in the Indian market, the company has chalked out a growth policy where its products will find application in more and more modern CVs. “The products we have developed for Daimler India Commercial Vehicles are undergoing final testing. The necessary approvals for the products have been received from Ashok Leyland, based on the advice of its axle manufacturers,” he said.
Global and local
Developing products as per the designs developed in Europe since 2010 for Roberto Nuti SpA, which manages the Sabo brand, Sabohema was off to a slow start. Besides addressing the European commitments of its Italian principal, the company started gauging the needs of the Indian market. Competing against established players like Tenneco and Gabriel, Sabohema, rather than approaching the OEMs directly, decided to penetrate the heavy-duty niche truck market. It would help it to gain a firm foothold in the Indian market, and the ability to increase the market share. The fact that Sabohema products were already tried and tested in the aftermarket helped, not only in India but the world over, especially with the company addressing the aftermarket needs of European CV majors like Mercedes-Benz, Volvo, MAN and Scania. The reputation gathered by the products of the company in the aftermarket put it in good stead. In India, Ahmed chalked out a strategy where the company would approach authorised dealers involved in servicing the vehicles directly. “Our teams gave them products free of cost for performance testing at the ground level. We were confident that our products were of high quality and would speak for themselves. The valuable feedback that we received, gave us access to the main doors,” Ahmed said.
Once the confidence to serve the local market grew, Sabohema carefully steered itself to be a manufacturer of products that meet the Indian conditions. Rather than manufacturing products that confirm to international design and drawing, the company began increasing its thrust on products that leverage global expertise and are engineered to address the local needs. This gave the company an opportunity to make its plant sustainable. Its plant in Gurgaon has an installed capacity to manufacture 5 lakh units of shock absorbers for commercial vehicles. It was built with an investment of Rs 15 crore and is working in 1 shift. Currently operational at 76% of the capacity, the plant also contains a research and development center with 12 people. The research and development centre undertakes new product development apart from constantly upgrading the existing product portfolio to address the market demand. Spending up to 3% of the revenues on R&D activities, Sabohema enhances productivity and optimises costs. It has set up a library of validated components for new product development.
The setting up of a library of validated components at the plant is claimed to help the company reduce the lead time in the development of new products. “It can take from anywhere between 4 weeks to 6 weeks for the assembly of a new component after the successful completion of durability and alignments tests. It is necessary to arrive at a robust product. It is important to develop the product with a thorough understanding of vehicle dynamics and operating conditions,” Ahmed said. He is confident of bagging the right volumes to introduce the assembly of bellows. Volumes will give the company the ability to optimise cost. The current requirement for bellows is met by importing them from the Turkish plant of Sabo.
To keep up with the advancements in CVs and to move to higher tonnage, Sabohema has associated with an Australian CV suspension solutions provider Powerdown Australia. It is a market leader in commercial vehicle shock absorbers in Australia and New Zealand with the largest aftermarket range available off the shelf. Powerdown has over 33 years of experience and technical knowledge in the shock absorber industry, an established OEM & Aftermarket distribution network, a footprint into new markets and an increasing overseas clientele base.
Currently, Powerdown is an OE supplier to a number of truck and trailer manufacturers in Australia.
Through the association with Powerdown, Sabohema is keen to further strengthen its position in the CV market, both in India and in the new markets. As part of the association, Sabohema has over the last 3 years developed shock absorbers as per the Australian manufacturer’s specifications. These would be exported. Sabohema, in-turn, would get access to new markets in the Asia-Pacific region. The entry of Powerdown Australia has changed Sabohema’s stakeholder arrangement. Earlier it was the Hema Group and Roberto nuto, which held 50% each. After the arrival of Powerdown, 3 partners now hold equal stake.
The coming together of 3 entities is said to be working to the advantage of Sabohema. “The advantage would be an effort by 3 partners to introduce new technologies and new products, not just in India but in other markets of the world. It will also reflect on the establishment of a successful long-term relationship,” Ahmed said.
With exports amounting to roughly 90% of what Sabohema produces, it does not come as a surprise that the company is keen to promote gas-charged shock absorbers. These have been developed in India and are being supplied to the Australian market. Close to 7% of what Sabohema produces goes to the OEMs. What goes into the aftermarket is largely lapped up by various state transport undertakings like Maharashtra, Gujarat, Telengana, Haryana, and Rajasthan. Happy that the market is increasingly taking stock of the shock absorbers the company makes, Ahmed said, “OEMs were reluctant to use our products since they were new, and this did not help accrue volumes. The rising move to rated payload and the entry of international players is rapidly changing the market dynamics. We are confident of it working in our favour.”
Hoping that the share of exports will go down to 50% from the current 90%, Ahmed expressed that Sabohema is also looking at making further inroads into the locomotive market. He pointed at the strong demand for comfortable Linke Hofmann Busch (LHB) coaches for both passenger and cargo transportation in India. Sabohema recently supplied a batch of 2200 units of shock absorbers to the Indian Railways. The company which had earned in 2012 a revenue of Rs 12 crore, expects to close the financial year 2017-18 at Rs 30 crore. By 2021, the company is looking at a turnover of Rs 100 crore. “The demand for shock absorbers will grow. With it, Sabohema also will grow,” he said.
It takes between four weeks to six weeks for an assembly of a new component post the successful completion of durability and alignment tests at Sabohema
SN Ahmed, CEO, Sabohema Automotive opines that it is important to develop the product with a thorough understanding of vehicle dynamics and operating conditions
Entry of Powerdown Australia will allow Sabohema penetration into newer markets
Sabohema has been optimising international solutions for Indian commercial vehicle market