Mr Park and Hyosung's R&D general manager JS Kim visited the plant near Pune in a bid to start trial production and will hold talks with Kinetic to select components for outsourcing by Hyosung. Hyosung already has a five-year technical collaboration with Kinetic for manufacturing its GF 125 model, which started trial production this week. "This tie-up will help the company to establish a name in India and build the Hyosung brand," Mr Park said.

Mr Park said that for now he was keen to continue the technical collaboration and was not looking at financial investments, but would consider that at a later stage, if required. About 50 per cent of motorcycle components would come from Hyosung. The GF 125, a four-stroke, four valve motorcycle with a box type dual cradle chasis, would be the second motorcycle from the Kinetic Group.

Kinectic group chairman Arun Firodia said the company would be investing at total of Rs 100 crore in manufacturing and marketing the motorcycles. Mr Firodia said the GF 125 would be targeted at the old motorcycle owners who are looking for upgrades. The model will be priced in between Rs 50,000 to Rs 60,000. Volumes in the first year are expected to be 30,000 and 60,000 in the second year. Mr Firodia said the component sourcing would begin with smaller components and move to bigger ones in two to three year's time.

Firodia is expecting components to bring in an additional turnover of Rs 20 crore to Rs 30 crore. Meanwhile, Kinetic has started mass production of the Challenger, the 100 cc four-stroke bike, that will hit the market before the festival season.