Monday, July 06, 2009

Kinetic Honda : RIP (1972-2008)

Brand : Kinetic Honda
Company : Kinetic

Brand Analysis Count : 406

Kinetic is another sad Indian brand story. The brand which was once synonymous with Luna and gearless scooters is no more.

Kinetic as a corporate brand is not dead but Kinetic as a scooter brand has been laid to rest in 2008 after the take over by Mahindra & Mahindra.

Kinetic was born in 1972 with the launch of Kinetic Luna which became a generic name for Mopeds in the country. Later in 1985, Kinetic formed a joint venture with Honda to manufacture scooters in India. The company then launched India's first gearless scooter KH 100 which became a run away success in India.

Kinetic Honda was a premium scooter in its brighter days. I would say that this was the brand that gave the ladies in India - the luxury of travel.

Since the scooter was ungeared, Kinetic Honda became the favorite mode of transportation for the women folks. The scooter was reasonable for city use and ladies loved it. So despite the high price, the sales was rocketing like anything. The product was not really good. The engine was unresponsive and mileage was bad. But people loved it because it was ungeared and had an electric start.

Somewhere down the lane, things started to go wrong for Kinetic Honda. Kinetic Honda was limited by their JV Partner to focus only on Mopeds and Scooters. Since Honda had another JV with the Hero Group ( Hero Honda), Kinetic could not enter these markets. At one stage the competition became intense in the moped and scooter segment. TVS with their Scooty carved as significant chunk of Kinetic Honda's market share.

The joint-venture between Kinetic ( Firodia Group) and Honda faltered during 1998. Honda wanted to buy out Kinetic , but Firodia was not willing to sell stake ( Read a report here). Finally the JV ended with Honda exiting the venture.

The exit of Honda was a huge blow for the brand . The consumers were sceptic about the quality issues since everyone knew that Kinetic Honda 's main USP was its technology from Honda.
Kinetic Motors was not affected by the exit of Honda. Infact, the company became more aggressive after this break up.

The issue with Kinetic scooters was more than the Joint venture. The brand had its issues with Product , Price and Promotions.
Regarding the ungeared scooter segment, Kinetic Honda was never successful with its new products or upgradings. It is said that in automobile segment, 90% of success depends on the product and rest is in other marketing mix elements. Hence if the product is very good, then the chances of success is very high.

Kinetic was unlucky in this front. The brand was not myopic or complacent. Infact I was surprised at the number of products this company has launched over these years. The brand was working on new products but somehow the products was not successful in the market.

For example, in 1996-97, the company launched its scootterette Kinetic Pride but was withdrawn because the pillion ride was not comfortable. In 1997, the company launched a powerful scooter Marvel but the product failed in the market. In 1998, Kinetic launched its Y2K complaint version of Kinetic Honda. In 2002, the company launched Kinetic Nova and Kinetic Zing but both were not big hits.

After the split up with Honda, Kinetic ventured into motorcylce manufacturing and launched Kinetic Challenger in 2002. In 2003, the company stunned the auto world by launching 4 models at one go. Kinetic launched Kinetic Boss, GF170, City and Kinetic Velocity.

Again in 2003, Kinetic launched India's most expensive bike Aquila priced at Rs 1.15 lakh. The brand was launched in collaboration with Hyosang Motors. Surprisingly Aquila was well received by Indian consumers. But Kinetic was complacent in projecting Aquila as its flagship offering. Rather it played cold to the demand from the market and did not pursue the opportunity.

Despite doing these , Kinetic failed in gaining momentum in the Indian market. The nail in the coffin came when Honda launched its own scooter Activa.

If you look at the failure of Kinetic Honda, one of the reason was the price. While Kinetic Honda was ruling the market, consumers were willing to pay a higher price . But Kinetic continued its high price without giving additional value to the consumers. After the exit of Honda , the core product - Kinetic scooter never got any better. Kinetic also priced its new brands Nova and Marvel aggressively thus putting off consumers. Consumers never wanted to pay a high price for a brand which was yet to demonstrate its technical superiority on its own. The brand could have developed a product that convinced the consumers that Kinetic could stand on its own. TVS did that with its Victor and improved upon its image through Apache. But Kinetic never had such a product to showcase.

Kinetic failed in its motorcycle venture for the same reasons. The products had its own flaws and Kinetic was not aggressive in marketing its products convincing the customers that they are not just scooter makers. May be the brand tried too much in a short period of time.

The story of Kinetic did not end like that. During late 2000, the brand tried to make a come back by launching designer scooters under Italliano range. But again , the brand faltered in delivering world class product.The final product from Kinetic was Kinetic Flyte which got rave reviews from auto reviewers.

Kinetic is not a sad story . In 2008, Firodias decided to sell the scooter business to Mahindra & Mahindra. Soon after the take over, Mahindra decided to drop " Kinetic " brand from the products. That was the end of an era.

Kinetic group is still running strong with its businesses in automotive parts and is a leading supplier to Tata Motor's Nano project.

For consumers, the death of Kinetic is a death of an era. It is sad to see a home grown brand dying because it could not catch the pulse of the market and develop unique technology on its own.