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Old 23rd September 2010, 16:15   #16
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I don't see any issues why HH won't taste success after the divorce (if at all it happens). You know why I feel so? Here's my view:
  1. No one says I want to buy a Hero Honda CBZ, but CBZ
  2. No one says that I want to buy a Hero Honda Karizma, but Karizma
  3. No one says that I want to buy a Hero Honda Pleasure, but pleasure
  4. Its Passion, not Hero Honda Passion
  5. Its CD100 and not Hero Honda CD100
On the other hand, I have heard people saying Honda Shine, Honda Unicorn.

It is quite clear that HH has created "sub-brands" under the HH banner. If they have a decent engine, I feel they would continue to be "World No 1" bike maker.

"Hero Honda is now Hero Motorcyles" - Still, fill it, shut it, forget it!
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Old 23rd September 2010, 16:28   #17
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>>>

Pardon my ignorance, but how reliable is this information and how immediate the sayonara? We have been hearing about an 'impending HH-Honda split' for some time now.

Any movements in the HH stock?

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Old 23rd September 2010, 16:29   #18
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@sgiitk, Bajaj bought a majority stake in KTM, not Mahindra IIRC. But like you said, I agree its an option for the cash rich Hero to make such feat. However, it will change the entire operating dynamics and target market of the Company and they must strive hard to prove themselves in another segment or create a whole new segment again. Their current major target market is the mileage conscious 100cc econo-motorcycles, which may change due to this impact.

I am sure all the current products will continue though, like Kinetic scooter after Kinetic Honda and TVS Fiero after Suzuki Fiero. TVS is doing better compared to the Kinetic , which chose to buy an Italian scooter company dies (fail to remember its name) but suffered in the quality department and ultimately got taken over by Mahindra. Needs to be seen how it goes for Hero now, only concern is the quality of their products in future.

Last edited by v.anand : 23rd September 2010 at 16:34.
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Old 23rd September 2010, 16:58   #19
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@ V Anand, wasn't it Aprilia?
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Old 23rd September 2010, 18:04   #20
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Initially, I feel, there won't be any sales drop for Hero. But unles they sustain the product upgrades as happened earlier, would find the going as a single a bit tough.

Kinetic has suffered the same fate earlier.

Things would turn out to be more tougher for Hero if Honda takes competion to the next level, which Honda would definitely. The costing pattern for Honda models of the future need to be seen as Honda is sure to bring in newtech product upgrades soon.

Last edited by rajeev k : 23rd September 2010 at 18:06.
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Old 23rd September 2010, 21:02   #21
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Quote:
Originally Posted by greenhorn View Post
there appears to have been an official denial of this
Venture with Honda not ending: Munjals - Money - DNA
That is perhaps a statement by the HH honchos to apply balm on the wounds and bruises created by the earlier newsitem that trigerred a lot of speculation in the HH share price, which became a BEAR target.Lets hope it assuages the sentiments of the share market (its more sensitive than the most sensitive human being so called SENSITIVE INDEX) for the time being but the cat (read BEAR) may be out of the bag sooner or later!
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Originally Posted by GTO View Post
Some questions. If they do indeed part ways:

- Can Hero continue to sell the bikes as Hero-Honda? Obviously not. Would a Hero CD100 have the same recognition as a Hero-Honda CD100?

- If Hero has cash, brand and distribution on one hand, and no R&D on the other, does it make sense for them to tie-up with any other international bike manufacturer? How many years behind are they of Bajaj's R&D?

Full marks to Bajaj though. Their transformation from a scooter to motorcycle maker is stuff of legend!
May be a repeat of Vespa 150 becoming Bajaj 150 in 1971 and BAL sustaining the brand image. But there are no kilometer long booking lists like those days and there is cut throat competition. So if brand Hero has any quality hiccups the market will show it the door.
They (HH) have been very weak on R&D being solely dependent on spoon feeding from Honda, a sad remnant of the old socialist days for manufacturers.
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Old 24th September 2010, 17:28   #22
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Quote:
Originally Posted by greenhorn View Post
there appears to have been an official denial of this
Venture with Honda not ending: Munjals - Money - DNA
They would say that, wouldn't they?

Lets think independent of these newspaper reports. Now that Honda has made a direct entry into the two wheeler market, and is fast gaining traction, would it want to maintain its partnership with Hero? End of the day, directly or indirectly, it is competing against its own self (when fighting for market share with Hero).

In the longer perspective, Honda definitely wants to go it alone only. Whether today or tomorrow, a divorce with Hero is imminent.

Quote:
Originally Posted by amtak View Post
Still, fill it, shut it, forget it!
Main question is : How long can Hero flog that 100 cc engine? Sooner or later, the market will mature and ask for better technology (just ask the Maruti 800 which ruled our market for 20 years). AFAIK, Hero doesn't have much of an R&D, does it? This will sure as hell be a wake up call for them.
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Old 24th September 2010, 20:58   #23
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Quote:
Originally Posted by GTO View Post
Now that Honda has made a direct entry into the two wheeler market, and is fast gaining traction, would it want to maintain its partnership with Hero? End of the day, directly or indirectly, it is competing against its own self (when fighting for market share with Hero).
Pardon my ignorance, but isn't this situation similar to one faced by Fiat? While Honda supplies engines to Hero and manufactures its own two-wheelers, Fiat also supplies engines to other car manufacturers, besides making their own cars. So, Fiat in a sense is competing with itself.

The main difference between Fiat and HMSI is that Fiat chose a partner (Tata) to sell its cars, while HMSI is riding all alone and this solo ride has paid off, at least as far as the impressive scooter market share it has captured so far. Maybe, Fiat could learn a thing or two from HMSI.
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Old 25th September 2010, 06:25   #24
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Venture with Honda not ending huh? Then how about this news?

NEW DELHI: Hero Motors on Thursday said it has joined hands with auto component-maker Magna Steyr India to develop new products for the global and domestic market.

"Hero Motors and Magna Steyr India announced on Thursday they have entered into a business development and technical assistance agreement," the Munjals-promoted Hero Motors said in a statement.

Under the agreement, Hero Motors and Magna Steyr India will jointly develop new product lines, including drivetrain assemblies for the "global recreation market, as well as the India automotive industry," it added.

"The alliance uniquely positions Hero Motors to provide end-to-end solutions for powertrain products worldwide," Hero Motors Managing Director Pankaj Munjal said.

Magna Steyr India, located at Pune, is a part of diversified global automobile component supplier Magna International. It currently employs 190 people.

The firm is active in various automotive and recreation product engineering domains such as engines, drivetrains, electronics, seating, functional development, interiors, exteriors and complete vehicle integration.

Source - Hero Motors ties up with Magna Steyr for new products - The Economic Times
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Old 25th September 2010, 13:43   #25
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back to the hero puch days. A cousin of mine had one ( the higher powered variant)
was a hoot ( at least he had the stories to back it up
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Old 25th September 2010, 17:25   #26
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IMO, Hero Motors, will no longer will be a Hero without the Honda, if it does not gets the rights to manufacture the Honda engines. I believe the HMSI's management is too ambitious to let them have the engines, else the position will be the same as it is at present. HMSI to grow in India has to butcher HH alliance.
Probaly this is the reason Hero is trying another alliance (with Magna Steyr India) for new products.
But, this is bad news for Indian Auto Industry as I fear that the world's largest bike maker will soon loose its tag.
This is a lesson for the other Indian auto cos, as it simply underlines the importance of inhouse R&D, as area were Bajaj & TVS have been working really hard.
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Old 26th September 2010, 23:01   #27
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Well, IMO after the divorce with Honda, Hero motorcycles will have to gear-up bigtime to be alive in the competition. All the successful bikes from this stable, be in commuter bikes or rider bikes, had a very strong japanese design. And Hero motorcycles had lot of backup from Honda to bring in new bikes.

Bajaj, after its ties were ended with Kawasaki had a very bad time until it came back strongly with Pulsar. And TVS also could sustain after its ties with Suzuki was ended. I think it TVS took a longer time than Bajaj to come back in market. Have to wait and watch what the strategy of Hero would be.
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Old 27th September 2010, 00:17   #28
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Quote:
Originally Posted by amtak View Post
I don't see any issues why HH won't taste success after the divorce (if at all it happens). You know why I feel so? Here's my
How long would they continue to run post a divorce with Honda? and on what basis? They have engineers who are more interested in designing stickers and paint jobs.
PR guys who are busy making creative ads(you know what i mean) and discovering ways to blow away money on a cricketer or a film-star.
No funding for National Road racing championship and all money goes to a cherry sport where 11 guys run madly after a cheery. may be they know their clientèle a bit too well. Thumbs down.
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Old 27th September 2010, 12:35   #29
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The divorce between Honda and Hero would be atleast good news for the customer as Hero motors will not able to sell their overpriced 100cc bikes at 125cc prices anymore. And without Honda engines, they won't be able to get away with sticker and paint upgrades anymore. Let's hope this will result in better bikes and better competition in the market.
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Old 27th September 2010, 14:39   #30
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In this day and age of globalisation, strategic alliance (bajab and kawasaki)and engine R&D outsourciing (clssic example of mahindra, tata and AVL), an economical solution will be found by hero group in time to deal with the divorce with honda motorcycles without drastic changes in market share in the short to medium term.

As some of you have pointed out, since BSIV has just been implemented, that gives at least 5 years to the Hero group to continue with the current line up of engines. In the mean time they can look at other options for further engine and product development.

After all, the reason why models like the splendor and Glamour sell (hero groups bread and butter) is because of their reliability, price and service network and not so much technology. If technology was the sole reason to the "aam admi" then i think we would see a lot more Honda Shines on the streets than HH Glamours.

The most logical step for Hero group to take after the divorce would be to outsource the R&D of design initially right after the split, but then have a long term plan to set up a R&D of its own or to look at an alliance with another company.

Hero group, the biggest bike maker in the world (in terms of volume) knows whats at stake here and i am sure they are well set with a plan B and C and D if need be.

Just a personal thought, no offence intended to anyone or any argument sought.

Happy motoring

Last edited by amrisharm : 27th September 2010 at 14:42.
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