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Kinetic, KYMCO Deal?

April 12, 2005
Filed under Uncategorized

India’s Kinetic, a former partner to Japan’s Honda Motor Co., has plans to restructure its scooter unit. According to Indian press reports, the revamped company may seek a partner in Taiwan’s Kwang Yang Motor Co. (KYMCO).
Kinetic’s two-wheeler activities are split between two companies: Kinetic Motor, which focuses on scooters, and Kinetic Engineering, focusing on motorcycles.
Kinetic Motor recently announced a restructuring to include an increase in authorized share capital and entry into strategic tie-ups and joint ventures. In a release, the company said it has “been exploring and evaluating possibilities of strategic tie-ups and joint ventures, and has been considering various options for short-term and long-term financial resources from domestic and international markets at the appropriate time.”
India’s Times News Network, citing industry sources, reports Kinetic is close to inducting KYMCO as a strategic partner. KYMCO could potentially purchase a 50% share in Kinetic Motor, the news service reported.
KYMCO, which has manufacturing operations in China and Indonesia, has expressed interest in producing product in India and Vietnam. A joint venture with Kinetic would provide a platform for KYMCO to access India’s large two-wheeler market, which is backed mainly by Japanese manufacturers.
Kinetic Motor last year acquired the license to manufacture and distribute seven Italjet scooter models in its home market and abroad. The Italjet scooters, which will use Kinetic motors, are scheduled to launch at the end of April. Kinetic Engineering has a technology tie-up with Korea’s Hyosung.

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