India is the second largest two-Wheeler market in the world after China. Demand for two-wheeled vehicles is 24.52% from 2009 to 2010 with total sales of 10.5 million units. The motorcycle segment contributes around 80% market two-wheeled vehicle. The most important factors of growth are great demand for two wheels from rural India, availability of simple financing options and lack of quality of public transport. The worlds largest two Wheeler company, Hero Honda Motors Ltd is the leading player in the Indian market. Hero Honda is a joint venture between the Indian hero group and Honda Motor Company of Japan. Hero Honda leads the market with the entire paragraph 4.600.130 rack in the year 2009-10. Company a profit of RS. noted sales growth 2231.83 crores in fiscal year 2009-2010, with 23.6% unit.
Recently the 26-year-old partnership looked at a turn, if hero group part ways, with Honda engines and motors sell Honda their entire share Hero Honda Motors Ltd decided. Participation patterns of Hero Honda is Group (Indian organiser) from 26.2% with hero, 26% with Honda engines (foreign promoter), 31.75% with foreign institutions, 7% with public and other 10% is with financial institutions, banks and investment funds, etc. Honda Motors participation at the company has a market value now will be taken nearly $ 2 billion of the hero group Munjal family. Until now Honda engine has the technology support for the products and Hero Honda has manufactured and sold products through its large network of distributors. Honda is on each product by Hero Honda sold royalty free paid. The hero has the partnership as one of the most successful joint venture in the history of the strong technological prowess of the Honda group with strong dealer network. As per the sources Honda and hero have been on topics such as the increase in royalty free sparring and spare parts purchases by Honda motorcycle and scooter India which has been resisting for a long time hero group was. Honda group will now focus its wholly-owned Indian unit founded in 1999.
Under the new conditions between the two parties agreed, Hero Honda continues to produce and sell the current models on the market. The company will sell like new products in national and international markets and to acquire, to develop new technology. Honda officials said that even a plan for new licences for the new products allow it be introduced under the new brand. In accordance with the terms and conditions of the separation continue to the R & D support from Honda until 2014 IE hero four years has to catch up R & D on their processes.
There are certain important issues that come into light after the Hero - Honda split. Until 2015, is it for the two wheels to the standards BS IV meet. To meet this requirement, must producer to make large investments in technology. Honda is well versed with injection system, which is required, the emission standards meet while the hero group of this technology expertise from the Division would lose. Second Hero is with Honda facing problem with the mention royalty free amount Honda. Hero group also fears that companies would have to pay large expenses tech support to the next level of the emission standards for Honda.
Hero and Honda have plans for the future can exploit opportunities after the split. Honda "First step will introduce it, two entry level bicycles in India." With the increasing costs in Japan, Honda decided to produce the product on the ground. The company comes with two and one four wheeler from Rajasthan. The company has announced to case to invest 500 CR in Rajasthan plant with a capacity of six lakh units. It is possible that companies their two Wheeler and four wheeler under an umbrella of brands. On the other hand is planning hero, international markets such as Latin America, Africa, and South-East Asia. Also your will immediately purchase the technology of other global markets.
This share sale allows Honda to expand its presence in India engine and start two new brands in the segment. Hero Honda is it important to keep their large dealer network and make sure that your trust not due to the split of the JV is dented. It should create measures to technological capabilities in Hero Honda.
