KBX targets OE, after markets

Deputy General Manager V Balasubramaniam said that KBX is expected to address both the OE and the after market through exports. While the latter is a bigger market, it requires a major exercise in branding, he added. The OE segment, on the other hand, has to meet tougher standards but is more stable and assured. KBX will target the after market in Europe.

In the domestic market, it is a supplier to Telco, Ford Mahindra and Maruti Udyog Ltd. It is also believed to be eyeing General Motors, Daewoo and Hyundai.

KBX, which has manufacturing facilities at Jalgaon and Gurgaon, in addition to the new plant at Chakan, about 30 kms from Pune on the Pune- Nashik road, enjoys a 55 per cent share in the domestic passenger car market and a 40 per cent in the light commercial vehicle (LCV) segment. While its presence in the HCV segment is viewed as "insignificant", this could change in the current year. Another Kalyani group company, Automotive Axles Ltd., serves this segment at present.

KBX, which posted a profit in 1997-98, has declared a maiden profit of 10 per cent. The improved performance in recessionary times has been attributed to better funds management and efficiency in operations, with reduction in working capital requirements and inventories. In 1997-98, KBX had a net profit of Rs. 6.5 crore (a loss of Rs.1.6 crore) while sales were Rs. 120.4 crore (Rs.120.3 crore), interest costs were Rs. 2.4 crore (Rs.3.1 crore) and gross profit was Rs. 10.7 crores (Rs.9.6 crore).