Battered by the lukewarm performance of the Tata Nano in the market, its gear supplier, Pune-based Kinetic Engineering, is now pinning its hopes on orders from other players such as Mahindra and Piaggio, a local report said.
Firodia family-controlled Kinetic Engineering, a supplier of powertrain and transmission systems, had invested INR2.6bn building a gear and powertrain components manufacturing facility, primarily to supply Tata for the Nano project.
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However, three years since the investment, the Nano supply deal has not achieved the expected returns, the Hindustan Times said.
Nano production at Tata Motors’ Sanand plant is around 30% of its installed capacity of 250,000 units a year and Kinetic has reported losses for five consecutive quarters. Its annual loss last fiscal year was INR1.1bn. The company plans to seek RBI approval for the extension of date of conversion/ redemption of its US$18m (INR936m) foreign currency convertible bonds by a year.
Sulajja Firodia Motwani, vice chairperson of Kinetic Engineering, said the company’s top line will improve with orders coming from several vehicle manufacturers. “We will supply gears for upcoming products such as Mahindra Navistar’s light commercial vehicle and Piaggio’s four-wheeler,” she told Hindustan Times.
She expects this fiscal topline to be around INR1.2bn from INR970m last fiscal year and hopes it will reach INR2bn in 2013-14.
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By GlobalData“We will not change facilities we installed for making gears for Nano,” she said. “We have hopes on Nano, especially the new version. That will pick up sales.”
