Kinetic's comeback?

It is hard for even the most optimistic observer to look at Kinetic Motor Company and think success. Yet, its stock is currently trading at 52-week highs, with investors seeming to believe that the company is headed for an upswing.

The reason for this sudden rush of optimism? The newly-launched Kinetic SYM Flyte, the first product from KMC’s ‘strategic’ tie-up with Taiwanese two-wheeler manufacturer San Yang Motors, which currently holds 16 per cent in KMC thanks to a preferential allotment in October 2007.

In fact, Sulajja Firodia Motwani, Managing Director, KMC, is so optimistic that she feels that the Flyte, which has been bathed with positive reviews from the automotive publications, will help pick KMC out of the doldrums, once production ramps up for the May-October ‘season’, when colleges reopen and the festival season starts. Motwani is so optimistic that she expects the Flyte to return the loss-making company (loss of Rs 37 crore in H1 2007-08) in the black by the second quarter of next year.

The latest figures from auto industry association SIAM (released before the Flyte was launched) show that KMC’s sales have been dropping; it sold just 177 units in the motorcycle segment and 2,852 scooters and 1,021 mopeds in November 2007. That’s why Motwani says that the company will primarily focus on scooters for the foreseeable future. “We have good brand recognition and a good sales network in this segment, so why should we not take advantage of it?” she asks. Movie star Bipasha Basu is the Flyte brand ambassador.

It’s a tall order still. Kinetic’s erstwhile partner, Honda (rather its India subsidiary, Honda Motorcycle and Scooter India) alone had 57.6 per cent share of the scooters market in April-November 2007. Then, there are others like Bajaj Auto, TVS Motor, and Hero Honda who are beefing up their scooters line-ups.

Therefore, to sustain its ‘Flyte’, Kinetic will need more wind beneath its wings.

— Kushan Mitra