This comes at a time when majors like Bajaj and Greaves have shelved expansion plans or slashed output. And this is from a 20-year old, Rs 30-crore company once rumoured to be heading towards the BIFR fold.

Small has proved beautiful for Kerala Automobiles when the three-wheeler market is in the grip of a 30 per cent demand recession. The company, the largest three-wheeler manufacturer in south India, has only 4 per cent to 5 per cent of the market share, while Bajaj claims 60 per cent of the market share. Kerala Automobiles' load carrier has made forays into the markets in Punjab and Rajastan, according to company managing director PK Sivakumar.In 1996-97, the company had only 40 dealers in the country. In the last financial 40more were added, he said.

Kerala Automobiles, which used to make 5,000 vehicles in 1995-96, had increased its production to 5,690 in 1996-97. In 1998, its vehicle production is averaging in the 600-650 range. The company expects to double its capacity by 1999-2000. Passenger three-wheelers cover only 20 per cent of Kerala Automobile's business. Capacity augmentation was intended to expand this segment of the market, Sivakumar said. Having little stakes to lose was useful in demand-stimulation operations, he added. From July 1, the KAL petrol model was to be costlier by Rs 1,000 and the diesel version by Rs 1,750. The hike has not affected the sales adversely, company sources claimed. On the contrary, the company has reinforced its status as a foreign exchange earner with exports to Sudan, Nigeria and other African countries, they said.

The KAL three-wheeler is to shed its long-standing API (Automobile Products of India) body design in an year or two. The company has already hired a Bangalore-based autoconsultant to improve the front design of KAL three-wheeler, especially the axle and the suspension. The new design will also incorporate the mandatory transition to four-stroke engine. The company has incurred Rs 15.3 crore accumulated losses in 1996-97. In 1994-95, this stood at Rs 15.66 crore. The net profit for 1996-97 was Rs 16.37 lakh, compared with Rs 15.29 lakh in 1995-96.