BackIf we hadn’t exited 2-wheelers, we’d have been marginalized: Sulajja Firodia Motwani
Kinetic’s Motwani on the aftermath of the firm’s exit from the two-wheeler segment and its alliances with Honda and M&M
Premium(Hindustan Times)
Mumbai: Nearly five years after selling its two-wheeler business to Mahindra and Mahindra Ltd (M&M), Pune-based Kinetic Engineering Ltd is gearing up to enter new business segments including electric vehicles like golf carts.
The move, said vice-chairperson Sulajja Firodia Motwani, will not only help the firm leverage the Kinetic brand name, but also help it tide over the downturn in the automotive industry.
In an interview at her Pune office, Motwani spoke about the aftermath of the company’s exit from the intensely competitive two-wheeler segment and touched upon its alliances with Honda Motor Co. and M&M.
Edited excerpts:
How has Kinetic group’s journey been since you sold the two-wheeler business?
We are very happy with the outcome for the group. It was a timely move. The reason why we partnered with Mahindra (we are still a shareholder in that business) was because we were always a niche player—mopeds and then gearless scooters. We were competing with larger players who are leaders in motorcycle segment and also competing in the scooter segment. So when you are competing with much larger companies that have deeper pockets and have greater penetration because of a strong presence in motorcycles that account for 90% of the market, you will not be able to compete and remain profitable in your business. You are competing for the same dealer, customer, and the advertising rupee.
Within the group, our focus is now on automotive systems; the companies are growing and doing well. We are also focused on our joint venture with Hyundai for elevators; and parking systems real estate is going to be good sectors in the coming years. The third area is, we are looking at coming back to market with some products under the Kinetic brand...but in a different segment, not in two-wheelers—looking at niche electric vehicles. That would be the focus for the next three to four years.
First, we restructured the business, built the automotive systems business and put it on a growth path, and now we plan to launch products under the Kinetic brand name. So it’s been an interesting journey. Let’s hope that Mahindra 2 Wheelers does well, we can then say it was a good strategy.
Was it a painful decision to sell off the two-wheeler business?
Of course it was. As we were all emotionally attached to it and we had a pioneering kind of status and nobody takes that away. The work that has been done by my father for the auto sector is to his credit, always. He was recently awarded the Padmashree for his contribution to the automotive industry. Creation of Luna, which has been the most affordable, motorized transport, or the Kinetic Honda—which revolutionized the market, especially for women—are his contributions.
We are proud of that legacy but the market evolves. You can refer to history and it always helps you to move forward. Because of our joint venture with Honda, we were not allowed to be in motorcycles as they had a joint venture with Hero for motorcycles. We, hence, had to be content with being a niche player. We were depending on them (Honda) for technology. Once they knew they are coming on their own, they stopped providing us technology. That put the company on a restricted path.
If we hadn’t done what we did, we would have ended up being more and more marginalized, ended up like LML and Hero Majestic. You cannot survive being a niche player as you have to compete with larger players. I think it was a right move as we were able to provide a continuing platform for all our stakeholders. Mahindra is a very good group to have as partners. Therefore, for our dealers, suppliers, factories and workers, the business continued.
The only regret I have is that Mahindra 2 Wheelers chose to carry forward only the Mahindra brand and not the Kinetic brand. It was left to them. We had to move on from there. Kinetic stands for engineering-oriented company, technology, innovation, modern—these values are what the brand is all about, we can leverage that for other areas. The brand will live on. The basic focus is to enhance the core values of the brand and bring products that are futuristic but in line with the values of the brand. While a Kinetic atta or Kinetic jewellery does not make sense...if I do Kinetic electric vehicles or any other product that has to do with engineering or technology, it makes sense.
But electric vehicles (Mahindra Reva, E2O) haven’t really taken off in India.
The area we are looking at is niche vehicles where electric technology has a ready acceptance. Things like golf carts, tourism vehicles, material handling, forklifts, etc. It’s the mass commuter segment where there are many conflicting requirements—people want an unlimited range but low-battery cost, that’s where technology is still getting evolved.
The issue is, if you move to lithium-ion battery for instance, the cost of is too high to justify it on a mass basis. It takes time for the technolgy to be widely accepted. Like the solar, wind and LED batteries, which eventually saw the cost coming down due to mass production, lithium-ion technology would also find acceptance. You have to be there, early. It’s a slow process and one has to invest carefully.
What is your opinion on quadricycle as a vehicle category? Would you consider having a presence in the segment?
We have to be very careful. Abroad, quadricycles are meant as low-speed vehicles that are meant for niche applications. Unlike what has been proposed in India, in Europe, such vehicles are allowed to move only in resedential areas and not with the traffic.
While low-speed vehicles that help in reducing use of fossil fuel are welcome, a quadricycle that is moving at the speed of 60-70km per hour is extremely dangerous. That speed may be a low speed in the US or Europe as their cars move at the speed of 150 on the freeways, in India 60-70 is a normal speed, higher than normal.
If you allow a four-wheeler car without adhering to the safety norms, I think it’s very short-term oriented move. I am waiting for the final notification. If quadricycles have to come, they have to come as a low-speed vehicle. Quadricycles have potential in segments that require low speed.
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