Why Hero-Honda was split?
A joint venture between the Hero Group (India) and Honda Motor Company (Japan) was established in 1984 as the Hero-Honda Motors Limited
Many foreign companies who were looking to set up their market in India came in with a collaboration with an Indian company. Some of the examples for it are, TVS-Suzuki, Escort-Yamaha, Kawasaki-Bajaj, Maruti-Suzuki etc.
Hero-Honda motorcycles were popular in the Indian market because of their fuel economy and low cost.
But in 2010, the joint venture between Hero Group of India and Honda of Japan came to an end. Let's look at some of the reasons for the split.
1. Conflict in Exports
During 2007-08, Hero-Honda wanted to expand itself by exporting to other countries but Honda already had its subsidiary companies in many countries.
This raised tensions because Honda believed that Hero-Honda will have to compete on its own since it could not influence its subsidiaries.
2. Board Members
There were four board members of Hero-Honda and all of them belonged to Honda. So, Honda had access to all the strategies & plans of Hero-Honda.
3. Conflict in Visions
Hero-Honda wanted to scale up its business by focusing and investing in its own R&D to which Honda was not comfortable.
4. Conflict in Competition
Honda Motorcycles and Scooters India Pvt. Ltd., a 100% subsidiary company of Honda, launched a 110 cc motorcycle that became a direct competitor to Hero-Honda bikes.
Glimpse of Hero-Honda :
Honda brand entered with the help of Hero and the quality products made the collaboration the most successful merger. The Hero Honda brand and the products ranging from CD100, Splendor, Splendor+, CD Dawn are still popular names at Indian villages.
Honda was already selling it's products across the globe and Hero couldn't export it's products or have a product development center of it's own even after becoming the world's largest two wheeler manufacturer. Hence, Hero and Honda decided to separate with Hero being able to extend it's base to Global market and develop it's own products.
From “Fill it, shut it, Forget it” to “Dhak Dhak Go” to “Hum mein hai Hero” the brand has grown and will continue to share and manufacture happiness and be a part of millions of Indian families..
In simple words,
Hero wanted to export his motor bikes to other EU nations, and Honda on the other hand didn't agree. Honda was already selling it's Motors to most of the country and certainly no one would want to compete our own brand.
So they mutually ended their pact in a very positive way. Hence both are different brands now.
Hands up!
Cheers ✌✌
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