Auto blues: Motoroyale Kinetic to liquidate stock, contain costs

Nandana James Mumbai | Updated on September 07, 2019

Ajinkya Firodia, MD , Motoroyale & Kinetic Engineering Ltd   -  PAUL NORONHA

Firm has been undertaking a production cut of 2 days a week

Motoroyale, Pune-based Kinetic group’s venture of multi-brand super bikes, has its long term strategy fixed on localisation, but in the short term, to counter the slowdown beleaguering the industry, it is focusing on liquidating its stock and limiting costs.

It has transferred 4-5 per cent of its factory workforce to the other companies of its group parent company (Kinetic Engineering) that do not operate in the auto sector, apart from effecting a production cut of two days a week, said Ajinkya Firodia, Managing Director of Motoroyale Kinetic Pvt Ltd.

Asked about lay offs, Firodia said that the company has not yet taken any such drastic measures since he expects the sentiments to turn positive during the festival season. In case the festival season sales are not as expected, there can be lay offs, Firodia told BusinessLine.

Given the current slowdown, selling off the inventory before the transition to BS-VI emission norms — set to be enforced from April 1, 2020 — and limiting costs remain a top priority for Motoroyale, said Firodia. Keeping this in mind, it is devising special payment schemes for customers, apart from offers and contests.

The production cut of two days a week, to liquidate the stock before moving to BS-VI, has been in place since mid-June.

Superbike sales drop

Firodia said that the superbikes segment, being a luxury category, has been privy to a 5-10 per cent drop in sales compared to last year. He attributed the slowdown in superbikes sales mainly to the dampened consumer sentiments, as well as the sense of confusion regarding the BS-VI transition and the proposed electric vehicle mandate for two-wheelers.

Despite the slowdown, the company is currently planning an expansion of its dealer network. It has six dealerships now. It is planning to launch three more next month. By the end of December 2020, it is aiming to have around 25 dealerships, he said.

India’s superbikes market has around 15,000 units annually, if it is classified according to the price. The market share of Motoroyale Kinetic in the imported superbikes segment is 15 per cent, he said.

Localisation will be a long term, major focus area of the company, he said, as it is planning to work with one of its partners, Norton, in developing bikes specially for India. The first such bike, which will be 50 per cent localised, will be launched in March 2020, and the other bike, which will be fully localised, will be launched in 2021. These products, at an “aggressive” price range of ₹2.5-3 lakh, will “drive the real volumes,” Firodia said.

Published on September 07, 2019

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