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Kinetic aims at 15% share of Indian bike market

Two-wheeler maker Kinetic Engineering Ltd launched a premium 125cc motorcycle model on Wednesday, the first in a series of new offerings, aiming to win 15 per cent share of the bike market over the next two years.

In the April-August period, Kinetic had a mere two percent share of the domestic motorcycle market where it competes with the Indian ventures of heavyweights Honda, Yamaha, Suzuki and Kawasaki, figures compiled by an industry body show.

Pune-based Kinetic Engineering, owned by the Firodia family, is a leading maker of mopeds, scooterettes or smaller, lighter scooters. It launched a 100cc motorcycle in December 2000 to mark its entry into India's growing but crowded motorcycle segment.

"We hope to sell about 15,000 (of the new) bikes in the year to March...and are aiming for a 15 per cent share of the market over the next two years," Sulajja Firodia Motwani, joint managing director of Kinetic Engineering Ltd told a news conference.

She said the company would need a portfolio of at least six to eight models to win that market share and had plans to launch one new motorcycle model every quarter over the next 12 months.

These include a 150cc motorcycle to be launched in April and another with a 100cc engine priced below Rs 35,000 in the economy segment.

The GF-125, made in technical collaboration with Hyosung Motor Co of South Korea, has a showroom price of Rs 49,998 in Delhi.

It will compete with other more powerful 150cc bikes -- the Fiero from TVS-Suzuki Ltd and the CBZ from Hero Honda Motors Ltd.

Nearly 80 per cent of India's motorcycle market is made up of 100cc bikes. But Motwani said the 125cc and over segment that makes up just seven per cent of the market now, would grow the fastest in the future.

Kinetic has already spent Rs 1.0 billion in the last three years to add to its motorcycle-making capacity and needed between Rs 80 and Rs 150 million in new investments to launch every new model.

Kinetic is also aiming to cut about five to seven per cent in production costs this year and 10 per cent next year to neutralise the looming threat from Chinese motorcycle makers, she said.

"If you look at China, there is about a 25 per cent cost difference between them and us and in a few years from now when everything is free we would have to compete."

She said the company was also exploring sourcing cheaper auto parts from China.

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