Scribd Logo
Upload

Welcome to Scribd!

  • 104 views

    Hero Honda JV Split

    Uploaded by

    Jennifer Atkinson
    The document summarizes the history of the joint venture between Hero Group and Honda Motor Company in India from 1984 to 2010. It describes how the joint venture Hero Honda Motors Ltd. was formed in 1984 and became the largest motorcycle manufacturer in the world. However, in 2010 Honda established its own subsidiary HMSI, signaling the end of the joint venture as the partners became competitors. Hero then rebranded as Hero Motocorp to establish its independent brand identity in the Indian market.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd

    Hero Honda JV Split

    Uploaded by

    Jennifer Atkinson
    104 views14 pages
    The document summarizes the history of the joint venture between Hero Group and Honda Motor Company in India from 1984 to 2010. It describes how the joint venture Hero Honda Motors Ltd. was formed in 1984 and became the largest motorcycle manufacturer in the world. However, in 2010 Honda established its own subsidiary HMSI, signaling the end of the joint venture as the partners became competitors. Hero then rebranded as Hero Motocorp to establish its independent brand identity in the Indian market.

    Original Description:

    Hero Honda Jv plit

    Original Title

    Hero Honda Jv Split

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The document summarizes the history of the joint venture between Hero Group and Honda Motor Company in India from 1984 to 2010. It describes how the joint venture Hero Honda Motors Ltd. was formed in 1984 and became the largest motorcycle manufacturer in the world. However, in 2010 Honda established its own subsidiary HMSI, signaling the end of the joint venture as the partners became competitors. Hero then rebranded as Hero Motocorp to establish its independent brand identity in the Indian market.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    104 views14 pages

    Hero Honda JV Split

    Uploaded by

    Jennifer Atkinson
    The document summarizes the history of the joint venture between Hero Group and Honda Motor Company in India from 1984 to 2010. It describes how the joint venture Hero Honda Motors Ltd. was formed in 1984 and became the largest motorcycle manufacturer in the world. However, in 2010 Honda established its own subsidiary HMSI, signaling the end of the joint venture as the partners became competitors. Hero then rebranded as Hero Motocorp to establish its independent brand identity in the Indian market.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 14

    License Raj

    Restricted foreign investment In 1980s, government permitted joint venture with minority foreign holding in Indian companies Supply side economics to demand side economics

    Hero cycles manufactured 16000 cycles per day Sold about 86 million bicycles till 2002 Nurtured an excellent network of dealers to serve

    to serve India's expansive market

    Honda motor company initially planned to enter two wheeler segment and electric generator segment

    Honda first chose kinetic engineering ltd. and formed Kinetic


    Honda Motors Ltd. joint venture for scooter manufacturing

    It chose Hero Group for motor cycle


    manufacturing as joint venture

    Wide Distribution Network Through Dealers

    Better Understanding Of The Market Dynamics

    Limited Options With

    Honda

    Wide Experience In Manufacturing Of Vehicles Commitment To Quality

    Focus On Financial
    And Raw Material Processes

    Salience Of Hero Brand

    Cordial Industry Relation

    Engineering Capabilities

    Joint Venture came up in June 1984 -Hero Honda Motors Ltd. Honda would provide technical know how and assist in setting manufacturing facilities

    Honda agreed for $500000 as one time lump sum fees and 4% loyalty Joint Venture had 26% equity each with 26% to the public and rest with the financial institutions

    Hero Honda Motors had grown consistently, earning the title of the worlds largest motorcycle manufacturer with annual sales volume of over 2 million Every 30 seconds, someone in India buys Hero Honda's top-selling motorcycle Hero Honda Splendor Company lead in both domestic two wheeler industry with nearly 48 % and motorcycle segment, with the shares of 59% Over 9 million motorcycles on Indian roads Deep market penetration with 5000 outlets

    DEEP PENETRATION NETWORK OF HERO LARGELY BENEFITED THE SALES ABSENCE OF MAJOR COMPETITORS IN INITIAL YEARS SOUND AND PROVEN TECHNICAL CAPABILITIES OF HONDA AND THE RELIABILITY OF HERO INCREASED MARKET FOR MOTORCYCLES

    BETTER FUEL EFFICIENCY

    CHANGE IN PEOPLES PERCEPTION

    DECREASE IN PRICE DIFFERENCE WITH SCOOTERS.

    Technological Leadership

    Innovative Advertising
    Consumer Initiatives

    Extending brand equity to new categories

    Stronger product portfolio


    Capacity expansion

    Rural Market Penetration


    Employee Management

    Ancillarization
    Expanding Dealer Network Market STP

    Announcement regarding formation of Honda Motorcycle and Bicycle India (HMSI) in August, 1999
    Hero Honda Motor Company stock plunged by 30 % on the day of announcement Overlapping of products had already started Example:-Honda Unicorn and Hero Honda CBZ Extreme in 150cc segment whereas Similar is the case with Honda Shine and Splendor plus Entry of new entrants increasing competition

    HERO HONDA 1984 - 2010


    HERO MOTOCORP LTD Paid 2,479.33 crore for assembly, manufacture, selling, distribution and exports licenses, which have been amortized over a period of 42 months up to 30 june14
    HONDA - Entered into a share transfer agreement - Entire share holding of 26% transferred to Hero, bringing an end to the joint venture

    Higher Royalty Payments

    Honda's reluctance to fully and freely share technology Refusal of Hero Honda to merge the company's spare parts business with HMSI

    Partners turning into Competitors

    Heros Rebranding Exercise HERO MOTOCORP New logo along with an advertising campaign

    Launched new products and announced its intentions of exploring international markets
    Remained successful in retaining its position as the top two-wheeler company in the Indian market According to Pawan Munjal MD of Hero Motocorp, the Challenges included - First is to bring our own product - Second is to go out and set up our distribution globally

    - Third to replace the brand, which was already one of the most
    established brands in the country

    You might also like