Kinetic Engineering Ltd has shortlisted a Chinese company for outsourcing engine components on a trial basis in a bid to cut costs.
Sulajja Firodia Motwani, joint managing director, said the company would be saving on expenditure by outsourcing components when the customs duty reaches 20 per cent after the next two years. However, Motwani did not reveal details about the Chinese company.
"These components are currently undergoing trials. They are essentially required in the engine. Even though we are yet to ascertain on which of our specific motorcycles we would incorporate these components, it will still result in huge savings when the customs duty reaches 20 per cent after two years," Motwani said.
The company has its hands full for the next fiscal with a series of launches that would establish Kinetic as a key player in the motorcycle segment, Motwani added.
Besides the ongoing exercise to import 100 units of the 250cc, v-twin engine Aquila, which will come in completely knocked down condition from Korean collaborator Hyosung Motors, Kinetic has decided to increase its requirement to 200 vehicles in order to counter heavy demand for these cruisers.
"The price point for these vehicles is crucial to an Indian customer. We requested Hyosung to give us the best pricing for the additional 100 units that we will import. From a customer's perspective Aquila is currently priced at about Rs 1.45 lakh (Rs 145,000) and will continue to remain the same," Motwani said.
On the manufacture of vehicles for Hyosung, Motwani said the company has already supplied 800 units of GF 125 to Hyosung. "We plan to ramp up production of GF 125 to nearly 5,000 vehicles by the end of the next fiscal."
The Boss variant, the "Kapil Dev edition", which was launched just a month ago , has witnessed an enormous demand following the World Cup frenzy. The company has sold about 5,000 vehicles in the previous month and expects to sell another 6,000 units this month.
Motwani said the group would register nearly Rs 1,200 crore (Rs 12 billion) of turnover in the current fiscal, almost similar to previous year's results. However, the motorcycle segment would make up the decline of contribution from mopeds.
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