Company sources said that LML would continue to honour the agreement on buyback of components and exports. Under an agreement signed between the two parties, Piaggio had started sourcing of components for its two-wheeler range in Italy from LML's plant at Kanpur. A buyback of engines, which was planned to start from July, is now uncertain due to the stand-off between the two promoters.

Sources said that LML has been in negotiations with two to three manufacturers for technology as Piaggio had communicated to the indian company recently that it should outsource technology from other manufacturers as it does not offer a family motorcycle in its Gilera range.

The family type is the most popular motorcycle which sells in India. Company officials pointed out that the company's decision to outsource technology was not driven by the recent stand-off between Piaggio andSinghanias.

It is learnt that LML was keen to source technology from Piaggio for mainly the customs bike, which does not have a significant market in the country. Elaborating on the company's exports, sources disclosed that LML has entered into a two-year contract with Piaggio under which it will utilise the Italian company's distribution network.

The agreement expires in December 1998. At present, the company has the option to export anywhere in the world without using Piaggio's network, but has not exercised it. Piaggio did not respond to any queries despite repeated attempts. Significantly, LML sources said that "the four stroke motorcycle and scooter would not be delayed and would be launched as per schedule". Company sources pointed out that the technology transfer was covered under a separate agreement and should not be linked to the joint venture agreement between the two promoters. "The flow of technology from Piaggio to LML is covered under separate licence agreements which are stand alone andsubsist independent of the joint venture. LML will continue to honour its obligation under all such agreements that are in force and in effect", sources said. "Even now, the agreement allows LML to source technology from a foreign company other than Piaggio", a senior executive added.

The company is planning to launch a 75 cc scooter code-named Marlboro in October. It is also launching a 63 cc scooterette `Trendy' next month.