In a move aimed at strengthening market presence, Firodia said the company had bought out Honda Motor Co's majority stake in the joint venture Kinetic Honda Motor Co Ltd (KHML) late last month. This was now being extended to the take over of two finance companies, Twentieth Century Kinetic Finance Ltd (TCKFL) and the Delhi-based finance firm Capital Trust Ltd.

On the issue of merging Kinetic Engineering and Kinetic Honda Motor, Firodia said it will take another year to arrive at a final decision on the issue. This is a shift from his earlier statement of not merging the two.

On new products, Firodia said the company will launch a four- stroke 110cc motorcycle next year. The motorcycle, now at the developmentstage, will be designed by Kinetic Engineering's in-house team while trials are to begin in the last quarter of 1998-99, executive director (products) MM Khera said. The company will match the benchmark models in its segment on looks, power and fuel economy, while its price will be lower than that of the competition, he added. Developing a new product involves an outlay of Rs 20 crore to Rs 40 crore, including the cost of dyes, moulds and research and development.

The upcoming Rs 40-crore Koregaoon Bhima plant will manufacture the motorcycle. The company will import the dyes, moulds and some capital equipment. The rest will come from the facilities created for the K-4, Kinetic Engineering's first step-through four-stroke vehicle.

Firodia told share holders that the company will focus on the southern region for mopeds, western region for scooterettes and motorcycles while scooters would be targeted at the northern region. Kinetic Honda Motor will seek to penetrate the northern market, with a substantialincrease in its advertising expenditure. At present, its ad spend is Rs 6 crore, which will go up to Rs 20 crore next year. For Kinetic Engineering, the ad spend is Rs 10 crore, which will double to Rs 20 crores, in the next year.