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K Giriprakash

Ms Sulajja Firodia Motwani, Joint Managing Director, Kinetic Engineering Ltd, at the launch of Velocity bikes in Banglaore on Tuesday. - - G R N Somashekar

Bangalore , Jan. 6

NEXT fiscal will see Kinetic Group finally making its transition from a predominantly scooter company to a motorcycle company.

Though Ms Sulajja Firodia Motwani, Joint Managing Director of Kinetic Engineering, maintains that the group is now a complete two-wheeler company with a vehicle in every segment and every price point, the group expects its motorcycle sales' to grow more than that of scooters in 2004-05.

The group expects to sell 1.75 lakh motorcycles in 2004-05 compared with 80,000 in 2003-04 and 1.4 lakh scooters next fiscal compared with 1.2 lakh in 2003-04.

Currently, scooters constitute nearly 55 per cent of the total sales of the group, bikes around 40 per cent and mopeds around 5 per cent. "The share of motorcycles to scooters will change during the next fiscal," Ms Motwani told Business Line.

She admitted that their erstwhile partner, Honda was gaining a better market share in the gearless scooter segment than those of Kinetic.

Kinetic Group widely known for its gearless scooters, in which it has a market share of around 40 per cent, launched four new bikes in October 2003. These include, the Boss, the Velocity, GF 170 and GF Laser 170 cc, both positioned as a sports bike. This was part of a strategy to capture part of a growing motorcycle market in the country, which is around 40 lakh per annum.

Even the television commercial for Velocity is aimed at informing the customers that the new motorcycle launch is from Kinetic thereby imparting the message that it is no longer a scooter-only company.

"We expect a huge growth in the motorcycle market and we want to steadily improve our share," Ms Motwani said. Last fiscal's revenues gave enough indication of the group's intent to make a major thrust into the motorcycle market. Nearly Rs 528 crore of the total revenues came from sales of motorcycles and to a lesser extent from mopeds while the share of scooters in the total revenues was around Rs 320 crore. This was in spite of the fact that in 2002-03, Kinetic sold more scooters than motorcycles.

The launch of the 115-cc Velocity motorcycles in October clearly indicates that Kinetic wants to take on leaders head on in the executive segment, which has blockbusters such as TVS Victor and LML Freedom.

The executive segment constitutes nearly 55 per cent to 60 per cent of the total size of the motorcycle market. "With the launch of Velocity, we are in the volumes game," Ms Motwani said. Since its launch, Velocity has already sold around 17,000 units. The company aims to sell around 10,000 units of Velocity every month by next fiscal.

To make an immediate impact, Kinetic is offering Velocity at Rs 38,300, nearly Rs 2,000 less than the competitors. It has also announced an exchange offer wherein the company will give around Rs 2,000 more than the resale value of the old motorcycle.

Plan to export GF Laser bikes

KINETIC Engineering has sought South Korean motorcycle maker Hyosung's permission to allow it to export GF Laser bikes, which is being manufactured under technical collaboration with the South Korean company.

Hyosung Motors is already in talks with Kinetic Engineering to use its facility as a production base for Aquila motorcycles. This would help reduce the cost of the bike by at least 30 per cent.

Kinetic wants to increase exports to around 25,000 units next fiscal from around 15,000 units this fiscal, Ms Motwani said.

She said there is a huge demand for Aquila motorcycles in the country and hence another set of these motorcycles could be imported again. "There is a possibility of importing these otorcycles though nothing has been firmed up yet," Ms Motwani said.

She said there is also a possibility of launching 250-cc Hyosung Comet, the sports bike, though the company is yet to discuss the issue with Hyosung.

The company found a huge demand for the 250 cc Aquila, the cruiser bike from Hyosung in the country. It sold all the 200 vehicles it imported from the South Korean company.

More Stories on : Outlook | New Products & Services | Two/Three Wheelers

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