whats reason behind to break the company hero honda when was the company

Under the new agreement, Hero Honda will be free to develop its own products. “We will continue to produce the current models under Hero Honda brand till the agreement ends in 2014.'

The fresh licensing provides us with new models and some of the models will be completely on the new platform,' Munjal said. “There will be continuous flow of new models going forward. The royalty paid in 2009-10 was 2.6-3% of sales. Going forward, they will be even lower,' said Pawan Munjal. “Royalty payments will remain in the current levels, as against 8% reported widely. The Indian company will also change the brand name of its products.Ĭontrary to speculation, the royalty that the Indian company will have to pay to Honda for every vehicle sold has not been raised, thus addressing at least one subject of investor worry. The Hero Group has bought time to develop its own research and development capability by signing a fresh licensing agreement until 2014 with the Japanese company for both current models and new launches. The fine print of the corporate divorce seems to keep some of these issues in mind. Honda will need to focus on its product portfolio in India and boost market share, he said.Īlso Read | Valuations hinge on future market presence Hero will have to build reliable technology and show it can tap foreign markets, he said.

“The termination of the joint venture opens up the opportunity for Hero to become a global player which was a constraint during the joint venture.' “The timing of the end of the joint venture is advantageous in terms of the fact that the overall market is expanding and specifically it has ended uncertainty within the two companies,' said Rakesh Batra, partner and national leader of the automotive practice at Ernst and Young. The two companies will face unique challenges in the years ahead as they rebuild their strategies. Photo by Bloomberg graphic by Ahmed Raza Khan/Mint

Whats reason behind to break the company hero honda when was the company