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India-based Kinetic Motor Co. Ltd. plans to sell an 11.1 percent stake to Taiwan's Sanyang Industry Co., and has entered a technical collaboration agreement to research, development and manufacture Sanyang product in India.
Kinetic will make a preferential allotment of 2.07 million shares at 66 rupees per share to Sanyang, for a total of 136.3 million rupees ($3.07 million), Kinetic said in a statement.
"This equity participation by Sanyang will enable us to expand our business in India as well as other countries," Kinetic Director Sulajja Firodia Motwani said in a prepared statement.
India is the second largest market for two-wheelers behind China.
Kinetic, which makes scooters, was set up in 1984 as a joint venture with Japan's Honda Motor Co. The relationship changed to a technical collaboration in 1998. Kinetic Engineering Ltd., a Kinetic Motor Co. Ltd. subsidiary which makes motorcycles and mopeds, has a technical collaboration with Korea's Hyosung Motors.
Sanyang makes more than 600,000 units of motorcycles and 20,000 automobiles a year from three production bases in Taiwan. Kinetic plans to launch the first Sanyang product in India during the next 12 months.
