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Old 5th April 2012, 09:11   #31
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Default re: Honda Siel UPDATE : Usha-Shriram sells stake, Honda now sole owner

Find it a bit amusing that the Chairman was informed by a board circular. The Chairman's role is supposed to chair board meetings. What is he doing then!!!
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Old 5th April 2012, 14:00   #32
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Default re: Honda Siel UPDATE : Usha-Shriram sells stake, Honda now sole owner

Honda Siel Cars India (HSCI), the joint venture between Honda Motor and the Shriram family of Usha International, is undertaking another round of fund-raising , this time to raise Rs 2,100 crore, two persons close to the development said.
Another round of fund-raising: Honda Siel to to raise Rs 2,100 crore more - The Economic Times

That makes it an infusion of about 3,300 crore in a matter of months! Anyone having concerns about Honda's plans for India can take reassurance from this figure.
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Old 5th April 2012, 20:25   #33
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Default re: Honda Siel UPDATE : Usha-Shriram sells stake, Honda now sole owner

ET report today seems like Usha is planning to milk the JV and exit. Its win win for all, Usha, Honda and Me (the customer). Yesterday's ET carried figures on HMSI pipping Bajaj and closing on Hero! after they exited the JV. You break the JV and then sell so much the you now try eat your JV partner! Hope this restructuring will make Honda more competitive. The 5% did not hold Honda back (it was more a pre-liberalization baggage), but just the thought of being independent might bring in a fresh thought.

Another possibility is an Indian Auto player teaming with Honda (escorts perhaps), that will bring in a new perspective into the game, unlikely but we do not know what goes in the board rooms.

Wait and watch.
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Old 6th April 2012, 10:36   #34
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Default re: Honda Siel UPDATE : Usha-Shriram sells stake, Honda now sole owner

Honda ain't going anywhere, they want to expand and this JV is not letting them to do so. Here are the details.

As of now, there are not-so-harmonious talks going on between Honda and SIEL on the valuation of the 5% stake which SIEL wants to sell and exit this joint venture.

The dispute seems to have started when Honda wanted to raise Rs. 3000 Crore for launching new small cars and Diesel engine cars in India in which SIEL is not willing to participate in it and rather decided to sell off its 5% stake and let go of the JV. As per some sources, the decision on the same will take place in coming two months time

Source : Honda SIEL Cars India Joint Venture To End In 2012 In India- Details | CarBlogIndia - All About Automobiles
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Old 6th April 2012, 13:58   #35
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Default re: Honda Siel UPDATE : Usha-Shriram sells stake, Honda now sole owner

Blaming the Indian partner and their 5% stake in operations is not an excuse for Honda, there were no blame games when things were hunky dory.

The present state of affairs is Honda's own making and the real reasons are plenty.

For one and a half decades Honda cuddled into a cmfort zone by simply assembling thai Honda City kits, selling them with chunky margins and having a supply backlog. Other than this they assembled Accords and imported CRVs both of which had decent demand. Honda was happy cashing in on a strong brand recall and negligible competition.

Through this period there was plenty that could have been done, PLENTY:
-A burgeoning small car segment where Honda had strong expertise
-Launch the diesel variants of CRV and Accord which were already present in other markets and start developing smaller diesel engines.
-Expand Indian operations, aim for 100% localisation, push for exports, increase volumes, bring down prices and increase profits.
-Enter new segments especially UVs where Honda had a decent portfolio of products.

I could go on and on!!

Honda did none of this, for one and a half decades they sat on their arses and kept doing the same god damn thing, assemble and sell City's. One model to pin their entire Indian operations.

Now the competition has caught up Honda decides to launch a small car which is competitively priced, now after all this time and realise cars can also be powered by diesel.

Nice of you to have a Eureka moment after falling flat on thy face!!

Imagine if this car was launched 5 years ago, or even now if the Brio came with a diesel option, or the volumes if the City had a diesel variant.

Honda has been selling RHD diesel CRVs abroad for more than a decade, why not India?!! Toyota cant meet the demand for a stratospherically priced diesel Fortuner, then why cant diesel CRVs be imported?!! Do their Kimono wearing moms have to catch a flight from Tokyo to UP and give them a whopping to realise this fact?!!

They say the US Accord was not designed to take a diesel engine, are they trying to tell us that with all their R&D prowess they cant plonk a diesel engine into a lather large engine bay.

Why did Honda not make India a regional product base when they knew the brand had great respect here and the country had everything to make it a great engineering and production base.

Despite this rant I am not convinced Honda India will change gears anytime soon, they will continue with their 'Thai fetish', try and push petrol cars in an increasingly diesel dominated market, be happy assembling and selling average numbers etc....

On the other hand the two wheeler division went all guns blazing as soon as they exited their joint venture. I don't think there can be a greater paradox within one brand!!
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Old 6th April 2012, 17:12   #36
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^ Answer is they got lazy and really confused which direction to move.

No competition led to king just being on vacation while stronger competition made strategic advancements. Honda could have done a lot, they have the complete arsenal to fight for US market, a MUV, SUV, sedans (small, big, bigger), premium brands and all.

India was and still considered a third world, really Honda; BMW selling more units than your Accord, Superb sending you packing and all you did was sit and get confused while they ran with the show.

Honda famous for F1 turbo engines and NA free revving beauties also got confused with the Electric revolution and alternative technology. Their FCV was a marvel but the industry did not green flag it. Prius gave them headache there. TSI engines took to their main domain of fuel efficiency and free revs, they did noting more than direct injection as if the boffins were sleeping and dreaming of the world they deem appropriate. It is tough to understand their logic?

Now that's that, Honda 2 wheeler division showed the scared conservative Japs that India is burgeoning beyond seams. Play with the latest versions of your product and you will be respected and have numbers on your side.

Hopefully they are pumping more money in for their claim of the pie. Hopeful we all are.
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Old 6th April 2012, 18:53   #37
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Default re: Honda Siel UPDATE : Usha-Shriram sells stake, Honda now sole owner

Quote:
Originally Posted by adg_andy View Post
....
Such a financial condition had impelled the management to expedite a board resolution for fresh infusion of equity capital through a rights issue.

The move is significant in that observers close to the developments do not rule out the possibility of Shriram, who controls Usha International Ltd (UIL) which has five per cent stake in the joint venture, looking at the option of selling his stake to a third party instead of Honda...
Can this be like this?
Without Shriram selling its stake, the required amount can also be pumped by both parties in the ratio of 95:5
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Old 7th April 2012, 09:53   #38
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Default re: Honda Siel UPDATE : Usha-Shriram sells stake, Honda now sole owner

As a former Honda car owner (OHC type II) let me tell you my presales and after sales experience with Honda and its dealerships left much to be desired.

This was one of the main factors that influenced me to shift to Toyota and buy not 1 but 2 cars in a span of 2.5-3 years. The difference between these companies' after sales and dealerships is like night and day. My next car will in all probability be a Camry or one of the German marques.

If Honda finds itself in this predicament then it has only itself to blame. After riding high for well over a decade with less than desirable after sales and not giving the customer the car he wants (diesel variants specifically), it is now reaping what it has sowed. It seems Honda Siel forgot the golden rule - The customer is king.

And before I forget - Toyota to invest Rs 1,400 crore; assemble Camry in Bengaluru - Rediff.com Business

This should provide Honda Siel more food for thought.

Last edited by R2D2 : 7th April 2012 at 09:57. Reason: typo
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Old 7th April 2012, 17:40   #39
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Default re: Honda Siel UPDATE : Usha-Shriram sells stake, Honda now sole owner

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Originally Posted by R2D2 View Post
A
And before I forget - Toyota to invest Rs 1,400 crore; assemble Camry in Bengaluru - Rediff.com Business

This should provide Honda Siel more food for thought.
Nice point. There can't be any comparison between the commitment of Toyota towards India with that of Honda's . Toyota's commitment is leagues ahead , I have had the good fortune of getting a first hand view of their growth in India and assisting as their banker around 7-8 years back . Back then , Toyota auto parts was exporting auto parts in excess of USD 1 Bn out of India - I think currently it should exceed twice that figure. Etios and Liva is the most public show of the commitment towards India.
For Honda , India has always been a non core market and I don't think they are going to change their focus outside of US and Japan - after all they chose to give Europe the miss too (figuratively)
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Old 7th April 2012, 20:08   #40
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Default re: Honda Siel UPDATE : Usha-Shriram sells stake, Honda now sole owner

I have a few questions.

1. How does this impact Honda Car owners like me.
2. Should I refrain from advising my friends to buy Honda cars.
3. I called up my Service Station Manager and he has no idea what so ever about this and has assured me that I should not worry about servicing/spares/insurance.


Rgds
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Old 7th April 2012, 20:38   #41
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Quote:
Originally Posted by nanduchitnis
I have a few questions.

1. How does this impact Honda Car owners like me.
2. Should I refrain from advising my friends to buy Honda cars.
3. I called up my Service Station Manager and he has no idea what so ever about this and has assured me that I should not worry about servicing/spares/insurance.

Rgds
I don't think the Board room theatrics has any bearing on the product market, it's the stock market and policy making that suffers, we all have talked about the policy paralysis that Honda has with respect for India. 5% is not a decision making stake and hence it's the Honda management that is being scrutinized here.

India's a upcoming market, no company would like to miss this opportunity and maybe 5% sleeping partner is what Honda is concerned
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Old 7th April 2012, 23:13   #42
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Default re: Honda Siel UPDATE : Usha-Shriram sells stake, Honda now sole owner

It isn't surprising to see JVs go sour. It's been over a decade and a half. And Honda honestly weren't going anywhere with the Jazz being priced at 8 lakhs and the Civic, commanding a noticeable premium of its own.

SIEL for Honda, was a bit of a monkey on its back. Well, you can't entirely blame the JV for the lack in progress, but now that the JV is going to be terminated, we can only expect Honda to pull up their socks here and give the Indian customers what they're really looking for. A well built, reliable and sorted diesel car.

I hope this would be the last hurdle for Honda in India.
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Old 7th April 2012, 23:32   #43
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Default re: Honda Siel UPDATE : Usha-Shriram sells stake, Honda now sole owner

[] The fact that Honda is willing to augment the capital base of the Indian subsidiary is a comment on their willingness to walk the talk WRT their Indian ops.

[] Shriram group was a premier industrial conglomerate, operating word being "was". The presence of the Siddharth Shriram branch in this company is purely a legacy issue - they were more or less the "India entry facilitators" from day one without any substantive management input/role in the JV. This entire drama is just to garner a valuation richer than the current state of the company would justify.
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Old 8th April 2012, 10:09   #44
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Default re: Honda Siel UPDATE : Usha-Shriram sells stake, Honda now sole owner

Quote:
Originally Posted by nanduchitnis View Post
I have a few questions.

1. How does this impact Honda Car owners like me.
2. Should I refrain from advising my friends to buy Honda cars.
3. I called up my Service Station Manager and he has no idea what so ever about this and has assured me that I should not worry about servicing/spares/insurance.
I think the next quote should put your fears to rest.

Quote:
Originally Posted by RS_DEL View Post
[] The fact that Honda is willing to augment the capital base of the Indian subsidiary is a comment on their willingness to walk the talk WRT their Indian ops.
Honda are here to stay. They are already talking about the money. Apparently, Sriram want about Rs.100 per share,and Honda are talking more like 50!

I would like this settled as soon as possible, then I maybe able to get a Jazz/ Brio AT!!!
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Old 9th April 2012, 10:41   #45
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Thumbs up re: Honda Siel UPDATE : Usha-Shriram sells stake, Honda now sole owner

Quote:
Originally Posted by Ashley2 View Post
Can this be like this?
Without Shriram selling its stake, the required amount can also be pumped by both parties in the ratio of 95:5
M&A is very tricky situation. We cannot predict. It might be possible that Honda pumps more capital into business, effectively reducing the shareholding percentage of Shriram- there are n number of possibilities. Lets wait and watch
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