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    Kinetic Honda was a joint venture between Kinetic Engineering limited, India and Honda motor company, Japan. In 1998, the joint venture was terminated after which Kinetic Engineering continued to sell the models under the brand name kinetic until 2008. Kinetic Honda is remembered for its legacy 2-stroke scooters, first in India when it was launched (in 1984) and the only in India until the late 1990s.

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    Kinetic Honda was a joint venture between Kinetic Engineering limited, India and Honda motor company, Japan. In 1998, the joint venture was terminated after which Kinetic Engineering continued to sell the models under the brand name kinetic until 2008. Kinetic Honda is remembered for its legacy 2-stroke scooters, first in India when it was launched (in 1984) and the only in India until the late 1990s.

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    213 views13 pages

    KineticHonda 1

    Uploaded by

    Sruthi Mohanan
    Kinetic Honda was a joint venture between Kinetic Engineering limited, India and Honda motor company, Japan. In 1998, the joint venture was terminated after which Kinetic Engineering continued to sell the models under the brand name kinetic until 2008. Kinetic Honda is remembered for its legacy 2-stroke scooters, first in India when it was launched (in 1984) and the only in India until the late 1990s.

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    of 13

    Kinetic Honda The Break - Up

    Presented By,
    

    Anandraj S Suresh Peter Sandeep S Sharanya K K Sruthi M

    About Kinetic Honda


    

    Kinetic Honda was a joint venture between Kinetic Engineering Limited, India and Honda Motor Company, Japan. The JV operated during 1984 - 1998, manufacturing 2-stroke scooters in India. In 1998, the joint venture was terminated after which Kinetic Engineering continued to sell the models under the brand name Kinetic until 2008 The brand Kinetic Honda is remembered for its legacy 2-stroke scooters, first in India when it was launched (in 1984), and the only in India until the late 1990s.

    Stakeholders
    Direct Stakeholders
    

    Kinetic Motor company Honda motors ltd. Firodia group Dealers Consumers Hero Honda TVS Bajaj

    Indirect Stakeholders
    

    Timeline
    

    1972 Launch of Kinetic Motor co. And Luna Mopeds 1984 JV signed between Kinetic motors company and Honda motors ltd. 1985 Launch of legendary KH-100 gearless scooter Aug, 1998 Reports of rift between Kinetic and Honda Dec, 1998 Purchase of 51% shares of Kinetic Honda by Kinetic Motor company ltd.

    Reasons for Break up


    

    Declining Revenue Serious constraints on Introduction of new Models Low Advertising expenditure provided by Honda Honda's priority for Hero Honda Differences in Marketing Strategies Firodias focus on money rather than technology

    The Competitors

    Survival Measures
    

    Promoting the umbrella 'Kinetic' Brand 'Pavilion' Dealership Wonder Loans Increase in Advertising campaigns Direct sales division 'Kinetic care' service program Decentralization of distribution network Optimizing operations

    'ALL IS WELL!!'
    

    Improved performance In 1999, KEL sales rose 20% KMCL sales rose by 23% Posted profits of 3.69 crore rupees Continued improvement in 2000, by 25%

    Unexpected Competition
    

    In Aug 1999, Honda announces wholly owned subsidiary to manufacture scooters. Rs. 200 crore greenfield project, capacity of 1 lakh units per year 'Got around' the contract with kinetic for not producing scooters in India Causes wide-spread concern, Confederation of Indian Industry Kinetic un-perturbed, believed they were the defacto leaders of gearless scooter segment.

    Learnings
    

    Strong necessity for Brand awareness. Failure to dictate terms in JV, affects company's vision Need to negotiate strong exit contract terms. Anticipate competition Market Research Technology and R&D should have been given primary importance

    HMSI launches Honda Activa in 2000

    Kinetic Decline
    

    Financial weakness to launch new models Wasted resources in failed 'Citycar' Project. Failed JV's with Hyosung and SYM Kinetic Motor Company reports net loss of Rs 7.12 crore in the March 2010 quarter Sales declined 90.95% to Rs 0.20 crore in the quarter ended March 2010 Sold just 200 motorcycles in June 2006 Takeover by Mahindra & Mahindra in 2008.

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