KINETIC BANKS ON LUCK IN 2-WHEELER MARKET
From the omnipresent Kinetic Luna in the 1980s to Kinetic Honda Scooty in the 1990s and Mahindra Kinetic Flyte in the early 2000s — Pune-based Kinetic group is taking a shot at the two-wheeler segment yet again. This time, it is looking to hitch a ride on the small but fast expanding super bike market (those above 250 cc).
A week ago, Motoroyale Kinetic, the group’s three-year-old venture of multi-brand super bikes, saw brand tie ups with three more global brands including SWM, FB Mondial and Hyosung. This was in addition to its existing association with Italian super premium brand MV Augusta and a joint venture with Norton. Through the brand associations and launches, Ajinkya Arun Firodia, MD Kinetic Engineering, is eyeing a 20 per cent market share in the fast growing super bike segment by next fiscal.
The move marks a U-turn for the company. In 2014, after selling its remaining 10.3 per cent stake in the two-wheeler business to Mahindra and Mahindra, Sulajja Firodia Motwani, vice-chairperson, Kinetic Engineering had said, it would not enter the two-wheeler space adding that the proceeds from the stake sale would be deployed in green technology business.
WhileMotwani has gone ahead with her plans, sibling Firodia is looking to ride on the brand legacy.
“For the last 10 years, we have focused on making Kinetic Engineering into an integrated auto component manufacturer, but a part of me never left the two wheelers, as it’s in my blood,” said Firodia. “The Kinetic brand is an asset created by my father (Arun Firodia), and it remains my responsibility to take it forward,” he said.
Firodia said the experience of having worked with global carmakers such as Renault, which it counts as the company’s key customers, has helped Kinetic sharpen focus on quality and processes and will come handy when localising foreign bike models for the Indian market.
The superbikes offered by Motoroyale Kinetic include MV Agusta’s Brutale 800 RR, Limited Edition Norton Commando and Dominator, SWM SuperDual, FB Mondial HPS 300, Hyosung Aquila 650 Pro and GT 250 R. The motorcycles will be assembled at Kinetic’s plant in Ahmednagar, Maharashtra. A plan to set up a dedicated assembly facility on a land near the company’s existing unit is also in the works.
The company plans to open six dealerships in the next six weeks, and another six in the coming months as it seeks to sell 2,500 superbikes in the domestic market next year.
As part of the agreement with Norton, Motoroyale Kinetic will make 50 per cent of the parts for Norton Dominator and Norton Commando Sport MK II bikes in India, while the engine, shocks and brakes of these bikes will be imported. Meanwhile, the company will continue to sell models as part of its tie-ups with Hyosung, MV Agusta, FB Mondial and SWM in the Indian market.
Firodia is hoping that Motoroyale Kinetic will become a ~100 billion company a year (including revenues from other Asian countries) over the next four to five years. The company is in talks with private equity companies for an amount of ~750 million to ~1 billion to fund growth.
Analysts are sceptical of the company being able to achieve the target. “It’s a tough market,” said Deepesh Rathore, co-founder and director at Emerging Market Automotive Advisory (EMAAA), a consultancy. With the exception of MV Augusta and Aquila, it’s unlikely that other brands will get any traction in a market where buyers have multiple options — ranging from a Royal Enfield and KTM to a Ducati and a Triumph. Competition will only intensify as most of them start launching madein-India bikes.
There are also smaller players like United Motorcycle, Indian and Benelli that are looking for a pie in the 10,000 per annum super bike market, said Rathore. He expects the segment to grow five times from the current levels over the next five years. “But I doubt if Motoroyale will be able to get a significant share in the segment,” said Rathore.
As part of the agreement with Norton, Motoroyale Kinetic will make 50 per cent of the parts for Norton Dominator and Norton Commando Sport MK II bikes in India