Italian motorcycle major Cagiva has reached an agreement with Kinetic Engineering of Pune, where the latter is likely to start manufacturing single-cylinder Cagiva models developed in Italy.

Cagiva president Claudio Castiglioni is planning to restructure his company, which includes three brands - Cagiva, Husqvarna and MV Agusta - and in comments made to mediapersons recently, he indicated that India is likely to be a major role-player in that streamlining operation.

The brand Cagiva will feature a series of Indian-made models. The deal, aimed at cost-effective quality at competitive prices, includes two-stroke 125cc Mito and a four-stroke version of the same motorcycle. Cagiva has also shown a prototype model called the Mito 500, which may be fitted with a 650cc engine. This model may also go into production here.

Cagiva also indicated that high-technology components would still be manufactured in Italy, but would be shipped for assembly to India.

The move will allow Cagiva to become an entry-level brand that will stand beside premium brand MV Agusta and complete the offering range.

India as a manufacturing base will allow them to lower manufacturing costs, while keeping quality constant. The first of the Indian-made Cagivas are likely to debut at the Milan Motorcycle Show in November 2007.