Mahindra and Mahindra acquired Kinetic Motors for Rs. 110 crores in July 2008. It has begun its restructuring of its two-wheeler business aggressively now. It intends to phase out Kinetic brand now after it has paid its outstanding dues and reduced dealer stocks and restructured sales and procurement network. The company still holds the right to use the brand name for next 25 years.
"The acquisition of Kinetic Motors was a cost-effective strategy as we got a ready manufacturing base and a go-to-market infrastructure in sales and distribution,” said Anoop Mathur, president of Mahindra 2 Wheelers. At the time of the acquisition, M&M vice-chairman Anand Mahindra had said, “Kinetic Motors is a strategic fit with our overall two-wheeler strategy. The acquisition gives us an opportunity to emerge as a full-range player with a presence in almost every segment of the automobile industry.”
Now the company intends to boost its two-wheeler business with new models portraying strong product line. Mahindra and Mahindra face tough competition from global players like Suzuki and Honda who are the market leaders in India. It hopes to get a marketing thrust from existing Kinetic dealerships in India as it has retained nearly 60 percent of these dealerships from the original company.
It has recently launched its first gearless scooter Mahindra Flyte which comes with exclusive features like anti-theft shuttle lock and petrol fill in front.
