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Kinetic enters an alliance with Italijet

13-January-2004
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Kinetic enters an alliance with Italijet

Beginning a new chapter in the history of Kinetic Group, Kinetic Motor Company has bagged the one time manufacturing and distribution rights for seven best-selling brands from Italy’s renowned two-wheeler maker, Italijet. The move is part of the company's strategy to counter the growing competition and to win back market share.

The seven scooters are Jet-Set, Dragster, Formula, Torpedo-Retro scooters, Velocifero-Retro, Millennium-Maxi Scooters and Jupiter. They will be launched in India in a phased manner over a period of next two years. This range of modern scooters is expected not only to expand the scooters market but also revolutionize the modern scooters segment in India.

Sulajja Firodia Motwani, Joint Managing Director of Kinetic Engineering, addressing media persons in Mumbai to announce the alliance said, “We have bought the complete rights for these seven international and proven models of scooters. These rights include the sale of scooters in the domestic market as well as for the export markets.”

As per the agreement, Italijet would not manufacture seven brands for which Kinetic has an alliance. When asked about investments, Arun Firodia, Chairman, Kinetic Group said, “If we have to manufacture these seven models on our own in India, it would have cost us an investment to the tune of Rs 200 crore. But with this alliance, the cost is considerably reduced. We already have the engines and the frames, only they will have to be customized to the needs of the Indian consumer.”

As per the agreement, Leopold Tartarini, the founder of Italijet will also design scooters especially for Kinetic. While, the distribution and manufacturing agreement for the seven Italijet scooters is a one-time arrangement, the designing of special scooters for Kinetic is for a period of five years.

On Tartarini designing for Kinetic, Arun Firodia, Chairman, Kinetic Group said, “With this, we look at becoming the most aspirational and happening brand in scooters.”

As regards the export market, Motwani said, “This arrangement should help us have a leading edge in the export market and boost our export volumes. Moreover, the Italijet scooters are very well accepted in Europe and US and we should be able to get an entry into both these markets. The company initially is looking at exporting 25,000 units.”

While, the scooters in India would be branded under the Kinetic brand name, for the export market Motwani said that they are yet to work out the deal on whether it has to be co-branded or whether it would only go by the Italijet brand name as Italijet is very popular in Europe. Kinetic is targeting for exports first. The two companies will share royalty on the export market.

Kinetic Motor Company sells half the gearless scooters in India, the world's second largest market for two-wheeled vehicles after China. Kinetic sells the Marvel, Nova and Zoom scooters and the Style, Zoom and Zoom Rockin' scooterettes. Kinetic Engineering, another part of the group, makes motorcycles and mopeds.

Talking about the scooter market in India, Motwani said that the scooter market in India has been stagnant but the gearless scooters have been gaining market share at the cost of geared scooters and mopeds, which have now become outdated.

In the past few years, the modern scooter category in the country has been posting very high growth rates. It has reached a level of 7.5 to 8 lakh units a year, double of geared scooters which now sells at about 4 lakh units a year. “I expect that this number should grow to 20 lakh a year over the next six years.”

According to Motwani, the Indian gearless scooter sales would be an estimated 900,000 units by the next financial year, and that Kinetic is expected to capture one third of this market.

Kinetic Motors Company will be launching JetSet in July. When asked about pricing, Motwani said that pricing of these latest international scooters would certainly be competitive with the existing market price. However, she added that the ‘Jet Set’ could cost approximately Rs 40,000.

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