Sabo­hema banks on ris­ing de­mand for com­fort­able com­mer­cial ve­hi­cles

Auto components India - - CONTENTS - Story by: Anirudh Ra­heja

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.

Aim­ing high

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

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