I have had that same kart for several years now and my kids love it. We had no problems with the original engine but my kids were not good at shifting so they just ran around in second gear. I ended up replacing the engine with this automatic version they put in the Tao Tao ATVs. It was a direct bolt in and all the wires hooked up correctly too. It is automatic and still has reverse.
This place is in Dallas and where I got my engine.
http://www.eagleatvparts.com/product...57feaac8ae5b75