Kinetic Engineering joint managing director Sulajja Firodia Motwani said Kinetic will be going on its own into the motorcycle segment with only design and few other inputs coming from a foreign company. These agreement will be signed in around a week's time. "We want to have a presence in all the categories in the two wheeler industry and motorcycle is a logical extension," she said. The rational behind the foray into manufacturing motorcycles is that it would offer significant volumes and contribute to turnover growth.

The Koregaon-Bhima plant which manufactures the K4 100 cc step-through motorcycles will be used for manufacturing the new four-stroke motorcycles.Only some increamental investments will be required for the motorcycle project.

Kinetic has entered into a five year license and technical assistance agreement with Honda Motor Co under which Honda will give technical knowhow, critical vehicle parts and access to Honda's export market even after the sale of Honda shares in KHML. This is the first of its kind JV for Honda.

This means Kinetic will be able to export the Honda brand scooters ZX and Marvel to 55 countries through Honda distributors. Exports contribute 10 to the turnover and is expected to go up to 15 per cent this year. Motwani stated that the Marvel model was gaining popularity in Turkey and many of the South American countries.

Honda sold its 50.92 per cent stake in KHML to KEL. The acquisition was made by KEL at a cost of Rs 35 crore. The share tranfer of 77 lakh shares at Rs 45 per share from Honda to KEL will be completed on December 24 after which Kinetic will not be using the Honda's name. The company expects to improve its financialperformance significantly in the 3rd and 4th quarter after the restructuring of the KHML shareholding. KHML has posted better performance in the second quarter of the financial year.

Kinetic Honda Motor Limited (KHML) JV was formed in 1986 and since then was manufacturing the DX, ZX and Marvel models of scooters. In 1993 Honda was the first companies in the country to pick up 51 per cent stakes in the Indian company. In September first week both the partners decided to convert their manufacturing collaboration into a technical one.