"Though there are synergies in the functioning of both the company, it makes better sense for these companies to operate as separate entities utilising their own strengths," Arun Firodia said here.

Besides, both companies, are engaged in different areas of bi-wheeler production. "While KEL produces mopeds and motorcycles, KMCL is in the business of producing scooters. Both companies have common dealerships and all purchases for both the units as well as computer software development are done jointly.

"Still each has its own strengths and we do want both the companies to survive on their own," he added.

"And, if we have a complex organisation, decision making becomes slow. So, we do not intend to sacrifice quick decision-making by merging the two entities. KEL and KMCL willremain two different entities but under the same management."

Meanwhile, the group plans to launch five new models of two-wheelers within a year to corner a larger share of this growing bi-wheeler segment. The group will roll out two scooter models and three motorcycles, both fitted with 4-stroke engines.

This includes a 125cc geared scooter in March and a 125cc variomatic transmission driven model in September 2000. The group has also indigenously developed a 100cc 4-stroke motorbike -- kx-4 -- that is expected to hit the roads around November. This would be followed by two models through its latest technological tie-up with Hyosung Motors of South Korea.

Besides, the Kinetic group is also working on a battery-powered two-wheeler, which is likely to hit the streets by November, 2000.

"The project is still in the research and development stage and we are making good progress. We expect to launch the vehicle in the later half of next year," Firodia said.

Meanwhile, despite an aborted move to producea mini car for India, Kinetic is now planning to re-enter the passenger car segment, albeit this time with an electric car priced at Rs 1.50 lakh. "The car is presently in the research and development stage and would be launched commercially within a year," he added.

"The technology for producing the electric car has already been procured and now we are trying to acclamatise it to Indian conditions. With duty concessions already available on clean and green vehicles, we expect to price it at Rs 1.50 lakh," he added.

The car, which would have a running cost of as low as below 20 paise per km, would go up to 60 km per full charge. The battery would have a three year life.

Besides, marketing it in India, KEL is also planning to export the electric car as knocked down kits to the United States, Europe and Latin America.

The group is also planning to introduce an employees stock option (ESOP) scheme for the employees of KMCL. Initially, 40,000 shares would be offered to employees in the manager grade."Later we would be including other key employees in the list. But we have decided to limit this option to only key employees in the company," he added.

Kinetic would be seeking shareholders' nod for the esop issue at its annual general meeting (AGM) to be held shortly.

At the AGM, the company has sought permission to issue 750,000 equity shares of the face value of Rs 10 each as ESOP. "In the current competitive business environment, it is necessary that the company adopts requisite measures for attracting and retaining qualified, talented and competent personnel for its business operation."

The issue price and lock-in period of such shares would be determined by the board in accordance with guidelines issued by the Securities and Exchange Board of India (Sebi).