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K Giriprakash

BANGALORE, Feb. 17

KINETIC Engineering is in talks with Chinese companies for sourcing components for its motorcycles.

The General Manager, Sales and Marketing, Mr Punit Chaudhry, told Business Line that the company would be able to save as much as 30 per cent through sourcing of components from China. "Chinese bikes may not have made a dent in the Indian market, but their strength lies in manufacturing components at extremely low cost," Mr Chaudhry said.

Mr Chaudhry said Kinetic would initially source components for its motorbikes and may later extend it for scooters. "We will keep tabs on quality when we source components from China," he said. The cost savings will help the company ramp up its operations in its plans and make its products more competitive in the market, he said.

He said the company expected to double the sales of its motorcycles to around 70,000 during 2003-04, with its largest-selling motorcycle expected to sell around 55,000 compared with 35,000 in 2001-02. He said the motorcycle segment was seeing an unprecedented boom in the country, but it was still half of what China sold each year which was around 30 lakh.

Mr Chaudhry said the company expected to unveil a new variant or a new product every quarter once it is able to ramp up production to around 10,000 vehicles every month. Kinetic has invested around Rs 60 crore in upgrading its existing plant.

Mr Chaudhry said though the company has a technical tie up with Hysong of Korea, there are no plans to offer it any equity. "Equity tie up can be restrictive as we found out from our alliance with Honda," Mr Chaudhry said. He said the company is now able to have a series of technology tie ups with various foreign companies for its motorcycles and scooters which was not possible earlier. He said the company plans to launch its 125 cc bike, Velocity in June this year. "We plan to be at every price point within a year from now," Chaudhry said.

According to the Society of Indian Automobile Manufacturers (SIAM), sales of two wheelers grew 19.43 per cent during the first 10 months of 2002-03. A total of 41.19 lakh two-wheelers were sold during April-January, 2002-03 compared with 34.48 lakh units a year earlier. Motorcycles and step through sales grew 34 per cent to 32 lakh units during the first 10 month of the current fiscal.

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