Arun Firodia, Chairman, Kinetic Group

"Our aim is to have a two wheeler to suit every customers need and preference-whether its affordability, fuel-efficiency, style, excitement, convenience, etc. We'd like to be seen as a company that is high on aspirations, world class and happening".

Arun Firodia, Founder and Chairman of the Pune based Rs 1200 crore, Kinetic Group of Companies, pioneered the concept of personalized transportation in the country with the launch of popular Moped ‘Luna’ and then revolutionized the scooter market with the Ultra modern scooters .

Kinetic, later in collaboration with Japanese major Honda Motors, also revolutionized the two-wheeler market with the launch of the first non-geared, electric-start scooter Kinetic Honda. Kinetic is among the first companies to enter the market of two-wheelers running on alternative fuel. The company launched its Kinetic Electric at the Auto Expo 2000 which runs on battery.

Then three years ago he followed the Bajaj Auto footsteps into the motorcycle market. Then in a fresh technical tie-up with Hyosung, the company launched two motorbikes -- GF 125 and GF 250 -- to enter the top geared motorcycle market.

Come 2004 and Firodia has written a new chapter in the history of Kinetic. He has re-kindled an old friendship to a business partnership. Kinetic Motors, the company, which makes scooters has entered into an alliance with Italy’s renowned two-wheeler maker, Italijet. In his interview with Anusha S, during the announcement of Kinetic’s tie-up with Italijet, Firodia shared his vision about the company and the industry.

Q. Could you tell us how did this tie-up with Italijet come about? And why?

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I have known Mr Leopoldo Tartarini for a generation now and ‘Italijet’ is a company founded by him in 1959. Today it’s world’s best two wheeler manufacturer. Italy is also the birth place of scooters and Mr Tartarini’s creations have been hailed as breakthrough designs across the world. I believe we have pulled of a coup of sorts by acquiring both the domestic as well as international rights for seven of Italijet’s bestselling scooters.

We are also excited that Tartarini has decided to design for Kinetic. Another advantage of this alliance is the fact that investments are low. 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 would be manufacturing the scooters at 30 per cent lower costs. We already have the engines and the frames, only they will have to be customized to the needs of the Indian consumer. With this tie-up we are looking at becoming the most aspirational and “happening” brand in scooters.

Q. Which are these seven best selling scooter brands and when will they be launched?

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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. The first of these scooters would be Jet Set which will be launched in July this year.

Q. What is Knietic Motors positioning going to be for the Italijet scooters?

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We are going to position these scooters as scooters for a car owner. A car owner should empathize with the scooter and should go for it. The basic positioning of these modern scooters are-comfort, convenience, and universal appeal and is very strong. With this worldclass range Kinetic will be able to take full advantage of this potential. We also expect this to give big boost to our exports across the world.

Q. Why did you feel the need for Kinetic to be present in so many different segments?

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Our company's strategy has been to have a presence in the entire two-wheeler market. Today we have and are the pioneers in mopeds and modern scooters. Our moped Luna was a run away success with the tagline ‘Chal Meri Luna’ and became a brand of its own, generic to moped category. Modern scooters, is a category we have created in the country and we have tremendous brand equity in that. This segment will continue to grow. Like I mentioned earlier, a full modern scooter is the ideal vehicle for an urban family, and a scooterette is perfect for the youth. We have tremendous technical expertise and a clear edge over our competition in this segment and we will always support this segment.

As for the Motorcycles it is the biggest segment in the country, and for Kinetic it is an opportunity for immense growth. We have historically been out of the motorcycles market since our erstwhile joint venture with Honda had prevented us from manufacturing bikes. This was one of the primary reasons for Kinetic to make the bold move of buying out Honda's majority stake in our JV. As a strategy, we want to have a product for every customer. It should be a ‘Kinetic for everyone’. Going forward we intend to have both scooters and mobikes contributing equally to the total turnover.

Q. What are your revenues and growth expectation for the Scooter and motorcycle division?

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We are looking at a 25 per cent growth in each of the divisions

Q. It’s been three years since you have forayed into the motorcycle market. How has the company progressed in this segment and what are your plans for this division?

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Well it is challenging for us and we hope to make it big in this segment amidst this competition. Last year we entered all the segments of the motorcycle market with four new product launches – Boss 115, Velocity, GF 170 and Laser. Next year, we will focus on nurturing these products and making them well established brands. We will look at increasing production, and beginning exports of these products. Our efforts are towards entering people’s mind as a serious bike maker. We hope to sell one lakh bikes next year

Q. How do you think these seven brands will change the market dynamics?

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This range of modern scooters is not only expected to expand the scooters market but also revolutionize the modern scooters segment in India. These brands are powerful, stable, stylish with a great image and will fulfill fuel economy. I think people who have stayed away from scooters considering it’s cheap and does not look good will come back to buying scooters. Also a motorcycle is difficult and dangerous to drive. When you can get the style and image of a motorbike within a scooter why go for the motorbike?

Q. How has the scooter market in India grown?

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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. This is expected to grow to 20 lakh a year over the next six years. 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.

Q. How has the two-wheeler market evolved in the country?

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The two-wheeler market in India has evolved very well. People have graduated from bi-cycles to Luna and now they use the two-wheeler for specific purposes. While people own a car, a two-wheeler has also become a must to own. As economy gets better every individual in the family will want to own a two-wheeler. It is one of the most dynamic industries today. India is the second largest two wheeler market in the world (after China), so the market size is large. Competition is fierce and we probably see more product launches and innovations in this industry than in any other.

I think two wheeler markets in the country is becoming very sophisticated, there is tremendous innovation, good growth and market size and it's the customer who is benefiting from it.

Q. What makes Kinetic as a group stand apart from the others- Brand Identity of Kinetic?

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Kinetic is known to be a modern, innovative company that understands and cares for its customers. We have always manufactured products that are ahead of time and are differentiated on the basis of styling, performance and value for money. Our scooters offer the best technology, performance and utility; while our motorcycles offer amazing value to the customer. Our ad spend on an annual basis is to the tune of Rs 50-60 crore.

Q. Could you briefly describe Kinetic’s latest alliance with Italijet?

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Kinetic Motor Company has bagged the one-time manufacturing and distribution rights for seven best-selling modern scooter brands from Italy’s renowned two-wheeler maker, Italijet. These rights include sale of scooters in India as well as global exports. Additionally, as per the alliance Italijet’s founder Leopoldo Tartarini will also specially design scooters for Kinetic for their exports. This tie-up would be for a period of five years and the specially designed scooters for Kinetic would be for the export market.

Q. What are the future plans for the entire Kinetic group?

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Our focus is going to clearly be on motorcycles and modern scooters. We think that both of these categories will continue to do well in the two wheeler market, and we have been working towards building a strong product portfolio in these. Our aim is to have a two wheeler to suit every customer need and preference – whether its affordability, fuel-efficiency, style, excitement, convenience, etc. We'd like to be seen as a company that is high on aspiration, world class and happening. We are also taking up international business as a focus area as I think our products are world class in design and quality.

Q. Now that second-hand cars are becoming cheaper by the day, do you think the market of two-wheelers will be adversely affected?

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No. There will always be a market for two-wheelers. In fact, I think it will be a co-existence. People will start using eco-friendly two-wheelers for short trips and use the cars for long family drives.