Business

Kinetic looks to Nano for volume

Sulajja Firodia Motwani

MUMBAI: The suspense surrounding Tata Motors’ rollout of Nano from Singur persists and the vendors/component suppliers with dedicated capacity for it are a worried lot.

While all have been adversely impacted, Kinetic Engineering Ltd., (KEL), the auto component manufacturing arm of the Kinetic Group that is making gears and gear-boxes for the small car, will be less impacted due to a phased approach.

The initial order for the Nano gears totalled around Rs. 70 crore for 1.75 lakh units and was to herald KEL’s entry into the passenger car component segment. The first phase of Rs. 35 crore for gear making was undertaken at KEL’s existing Ahmednagar works. The assembly unit of Rs. 15 crore was to have come up at Singur.

Speaking to The Hindu, Sulajja Firodia-Motwani, Managing Director of KEL, said, “machinery has been set up and we have already supplied sample parts. The second phase with additional machinery for assembly will come up wherever the site may be.”

There are issues confronting the automobile industry, not the least of them being access to capital which has become expensive and a higher interest rate environment for customers going in for hire purchase.

“Thus far, there has been no slowdown in terms of orders but liquidity is an issue. For us, the best way is to have a good product mix. We are supplying to makers of two-wheelers, commercial vehicles and passenger cars, besides off-road players. KEL’s clientele include Tata Motors, Force Motors and several international companies. KEL has small engines of up to 500 cc ideal for two-wheelers and all terrain vehicles or jetski, commercial vehicles and precision components. Components for CVs and two-wheelers account equally for KEL’s businesses but “we are consciously getting into transmission and powertrain assemblies and will supply complete small engines,” said Ms. Motwani.

KEL has orders for transmission shafts worth Rs. 30 crore from two German Tier 1 manufacturers.

It has developed an engine for two-wheeler giant MV Agusta. The project, which was deferred, has been restarted. Kinetic is also working on an engine for the joint venture with tractor major Mahindra & Mahindra.

Sales to group company Kinetic Motors are only 10-15 per cent of its total sales. KEL targeted a turnover of Rs. 500 crore in 2009-10,

“It now seems unlikely that we will reach that figure but how close we get to it depends on the volumes we get from the Tata Nano,” Ms. Motwani said.

© Copyright 2000 - 2009 The Hindu