honda selected the hero group for a variety of

7/28/2019 Honda Selected the Hero Group for a Variety Of

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Honda selected the Hero Group for a variety of

reasons which included . Its engineering capability.y Relevance and salience of H ERO brand.

y Distribution network.y Commitment to Quality.y Know-how and experiencein handlinglargevolumeproduction and distribution.

y Tightfocus onfinancial and raw materialprocesses.

y CordialIndustrial Relations

Introduction On Hero .

y Hero group was started by the four Munjal

brothers in theyear 1944 byestablishing bicycle spare parts

business in

Amritsar. y Hero Cycles manufactured over16000 Bicycles a day.y They sold about 86 million bicycles in

aggregate as of 2 008.y They had nurtured anexcellent network ofdealers to serveIndia s expansivemarkets.

y Over the yearsHero Group hadenteredmultiple businessareas

Introduction On Honda Motors .


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y Honda Motor Company Ltd is aJapanesemultinationalcorporation primarily known as a manufacturer of

automobilesand motorcycles. y Founded: 24 S eptember1948y Founders:SoichiroHonda, Takeo Fujisawa

y First production automobile f romHonda wasthe T360 minipick-up truck powered by a small 356 cc straight-4

gasolineengine.

y First production carfromHonda wastheS500sports carContd .

y Honda Motors initial plans called for bothtwo-wheeler market

and the e lectric generator market.y Honda Motors first chose Kinetic EngineeringLtd. and formedKinetic Honda Motors Ltd and this Joint

Ventureworked in the

field ofScooters Manufacturing.

y Honda Motors cameto the Hero Group as

thelast compromisechoice for its motorcycle venture

The Deal is Done (June 1984) .

y Honda agreed to providetech. know-how toHero Honda


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Motors and setting up manufacturingfacilities. This

included

the future R & Defforts.

y Honda agreed for a lump sum feeof $500,000& 4% royalty.y Both Partners held26% of the equity with

other26% sold tothe public and the rest held tofinancial institutions

Success Story .

y Hero Honda Motors had grown consistently,

earning thetitleofthe world s larg est motorcycle manufacturer after

having

churned out 1.3 million vehicles in2001.

y During the f iscal year2008-09, the companyhas sold 3.28million bikes and the net profit ofthe company stood

at`1281.7 crores, up 32%from the previousfiscalyeary World s larg est two-wheeler manufacturerwith annual salesvolume ofover2 million motorcycles.

y Owns world s bigg est selling motorcycle

brand HeroHondaSplendor.

y Deep market penetration with 5000 outlet

Reasons for success .


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y The deep penetration network of Hero largelybenefited thesales.

y Absence of major competitors in initial years.y Sound and proven technical capabilities ofH onda and thereliability of Hero.

y Increased market for motorcycles:

y Better Fuelefficiency.

y Change in people s p erception

Some concerns .y In August 1999, Honda Motors announcedHonda Motorcycle& ScooterIndia to initially make scooters and later,

motorcycles as well.HeroHonda Motor s stock

plummeted by 30% on the day ofthe announcement.

y Competition hotting up

Honda Motors Selects Cyberoam forReliable and Cost-effective Network ProtectionIn April, 1984 Hero Cycles, India and HondaMotor Company, Japan inked ajoint venture and the world's single largestmotorcycle company was born.

Hero Honda Motors Limited (HHML) is theWorldNo. 1 two wheeler companyand one of Honda Motor Company's mostsuccessful joint ventures, globally.HHML's performance was nothing less than arevolution on two-wheels. Hero


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Honda has sold over 15 million motorcyclesand has consistently shown adouble digit growth since its inception. Today,

every second, a motorcycle soldin the country is a Hero Honda.In two decades, Hero Honda has built twoworld-class manufacturing facilitiesat Dharuhera and Gurgaon in Haryana. Thesefacilities now churn out over 3.5million motorbikes per year.

Hero Honda

Hero Honda Motors Ltd.

Type

Public companyBSE:HEROHONDAM

Industry Automotive

Founded

January 19, 1984 inGurgaon, Haryana,India

Headquarters New Delhi[1] , India

Key people

Brijmohan Lal Munjal(chair and founder)

Toshiaki Nakagawa(joint managingdirector)Pawan Munjal
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(Managing Director &CEO)[2]

Products Motorcycles, Scooters

Revenue U$ 2.8 billion[citation

needed]

Website www.Herohonda.com

Hero Honda Motors Limited is a two wheelermanufacturer based in India. Hero Honda is a joint venturebetween the Hero Group of India and Honda of Japan[3].The company is the largest two wheeler manufacturer in

India [4] and also has been referred to as the world's biggestmanufacturer of2-wheeled motorized vehicles since 2001,when it produced 1.3 million motorbikes in a singleyear[citation needed]. The 2006 Forbes 200 Most Respectedcompanies list has Hero Honda Motors ranked at 108.[5]

In 2010, it was reported that Hondaplanned to sell its stakein the venture to the Munjal family.

Company profile

Hero is the brand name used by the Munjal brothers fortheir flagship company Hero Cycles Ltd. A joint venturebetween the Hero Group and Honda Motor Company wasestablished in 1984 as the Hero Honda Motors Limited AtDharuhera India. Munjal family and Honda group both own26% stake in the Company. In 2010, it was reported thatHondaplanned to sell its stake in the venture to the Munjalfamily.
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During the 1980s, the company introduced motorcycles thatwere popular in India for their fuel economy and low cost.A popular advertising campaign based on the slogan 'Fill it

- Shut it - Forget it' that emphasised the motorcycle's fuelefficiency helped the company grow at a double-digit pacesince inception. The technology in the bikes of Hero Hondafor almost 26 years (19842010) has come from theJapanese counterpart Honda[6]

Hero Honda has three manufacturing facilities based atDharuhera, Gurgaon in Haryana and at Haridwarin

Uttarakhand. These plants together are capable of churningout 3 million bikes per year.[7] Hero Honda has a large salesand service network with over 3,000 dealerships andservice points across India. Hero Honda has a customerloyalty program since 2000,[8] called the Hero HondaPassport Program.

Company Performance

During the fiscal year 2008-09, the company sold 3.7million bikes, a growth of 12% over last year. In the sameyear, the company had a market share of 57% in the Indianmarket[9]. Hero Honda sells more two wheelers than thesecond, third and fourth placed two-wheeler companies puttogether.[10] Hero Honda's bike Hero Honda Splendor, theworld's largest-selling motorcycle for the years 2001-2003[11], selling more than one million units per year.[12]

Termination of Hero and Honda Joint Venture
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In December 2010, the Board of Directors of the HeroHonda Group have decided to terminate the joint venturebetween Hero Group of India and Honda of Japan in a

phased manner. The Hero Group of India would buy outthe 26% stake of the Honda in JV Hero Honda.[13]. Underthe joint venture Hero Group could not sell intointernational markets and the termination would mean thatHero Group can exploit global opportunities now. Sincelast 25 years the Hero Group relied on their Japanesepartner Honda for R & D for new bike models. So there areconcerns that the Hero Group might not be able to sustain

the performance of the Joint Venture alone.[14]
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honda selected the hero group for a variety of

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