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Kinetic nurses plan to launch 500 cc Euro-compliant mini car at Rs 100,000

Kinetic Engineering Limited chairman Arun H Firodia said he still nurses hope of launching his mini car project that would be Euro-II compliant.

The company had sought excise concessions on the micro-car and is still awaiting a response from the government. ''We are waiting for a new government to take charge, '' he said.

The company had stated that the proposed 500 cc car should be charged excise as per other vehicles in the segment, that is at 15 per cent, and not 40 per cent as in the case of passenger vehicles.

''This relaxation would have helped us price the car at Rs 100,000 and make it more affordable for people. Without the excise relief, the price tag would go up to Rs 150,000,'' he added.

The company has already been refused the concession once by the government but KEL is still urging the Centre to reconsider its request.

The car, Firodia claimed, is Euro-I compliant and could be modified to suit Euro-II emission norms.

However, development work on the car has been stalled. ''The project is still at the prototype stage and no investments have been made. We are waiting for the excise relief.''

The car project was launched with much fanfare a few years back. The company had then announced that the car would be produced at its existing manufacturing facility in Koregaon Bhima near Pune, which also houses production lines for four-stroke motorcycles.

The unit has an installed capacity of 200,000 units per annum but only 50 per cent of the capacity was expected to be utilised by the first year.

It has targetted to sell around 15,000 cars a year. The micro car, which was to have a 70 per cent local content at launch, was to be powered by a Briggs and Stratton, US, petrol engine.

Incidentally, the only automation use the engine has been put to earlier is in golf carts.

The basic design for this two-door, unnamed car has been procured from Exxam of France. The car was said to offer a fuel efficiency of 20 kilometres per litre of petrol.

The car was to be available only in automatic transmission version. However, KEL also intended to launch geared versions of the micro-car within two years of its launch, targetted at the taxi segment.

Meanwhile, Kinetic Motor Company Limited (erstwhile Kinetic Honda Motor Company Limited) plans to launch a 73cc scooterette and a four-stroke scooter during the current fiscal.

The 73cc scooterette would be called the Kinetic Style. These new introductions are expected to contribute to higher sales and profitability of the company.

Riding on these models, Kinetic expects to record a further improvement in its performance during the year. It had recorded a 70 per cent surge in net profit during 1998-99 to touch Rs 36.9 million from Rs 21.7 million a year earlier.

The board of directors of Kinetic Motor had recently recommended 15 per cent dividend for 1998-99.

Gross profit for the year stood at Rs 103.3 million, up 35 per cent from Rs 76.4 million in 1997-98. However, the company witnessed over nine per cent drop in sales during the year at Rs 3.20 billion from Rs 3.53 billion a year earlier.

Sales in the first half were reported at Rs 1.43 billion while in the second half, it rose to Rs 1.77 billion, an increase of 23 per cent. Exports from the company also rose 12 per cent during the financial year to touch Rs 282.2 million.

The company has also expanded its dealer network by adding 80 more dealers to its network by synergising with the existing Kinetic Engineering moped dealers.

During the current fiscal, the company plans to further strengthen its dealer network by tapping into the widespread distribution network of KEL dealers throughout the country.

UNI

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