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Hero Honda: Is It Honda That Made It a Hero?

Decent Essays

1. Executive Summary

Hero Honda Motors (India) Ltd. is the World's biggest manufacturer of motorcycles (by quantity). Starting as a bicycle company, it set up a 50/50 joint venture, set up in 1984 with Honda Japan, to manufacture and sell motorcycles in India. Honda brought in the technological know-how, and Hero the India presence, and the local manufacturing ability.
Hero Honda Motors captured the market for motorcycles in India, by offering an affordable 4-stroke, 100 CC motorcycle, that was extremely fuel efficient.
They also established dealerships al over the country – even rural areas – . The strategy of Hero Honda Motors was to capture the market by offering a superior product at an affordable price, with excellent customer …show more content…

The Hero group vision is to build long lasting relationships with everyone (customers, workers, dealers and vendors).
"Hero", is the brand name used by the Munjal brothers in the year 1956 with the flagship company Hero Cycles.

2.2. The Hero-Honda Joint Venture

In the year 1984, Mr. Brijmohan Lall Munjal, the Chairman and Managing Director of Hero Honda Motors (HHM), headed an alliance between the Munjal family and Honda Motor Company Ltd. (HMC).
Although not the first choice of partner, (Hero sought a partnership with Bajaj Auto, Firodia Group and Kinetic Engineering Ltd. First) it was a successful choice: The alliance became one of the most successful joint ventures in India. Honda provided the engineering and technical know how, and Hero provided an extensive presence in the local (Indian) market.
The J.V was renegotiated and extended until 2004 in 1994-1995.
This round of discussions was less smooth since Hero felt that the technical design support of Honda was waning.

2.3. Post 2004

In the year 1999 HMC announced the establishment of a 100% subsidiary, Honda Motorcycle & Scooter India (HMSI). This announcement caused the HHM stock price to decrease by 30 percent that same day.

The Munjal family had to come up with some new strategic decisions as, HMSI and other foreign new entry

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