There had been quite a number of speculations recently about Hero Group and Honda to drift apart from their age old joint venture. Now, according to the latest report published by a Japanese news paper, Nikkei Business Daily, both the companies have reached a basic agreement to dissolve the partnership. Honda will go independent in the Indian market and will have new strategies to place its products in the Indian market.
The Japanese partner will sell all its shares to Hero Group owners by as early as March 2011. This sale can make Honda richer by at least $1.2 billion. However, the dissolution of the partnership will be gradual and there will be a standing agreement between the companies where Honda will provide its technical expertise to Hero Honda for development of new bike models by Hero Group till 2014.
This is one of the oldest joint ventures in India which started back in 1984 and marked the entry of Japanese auto maker in the Indian market. In a similar development recently, Renault and Mahindra had parted ways when its entry level sedan Logan failed to make any serious impact in the Indian market and refused to pick numbers. Renault decided to part ways with Mahindra and announced to become an independent brand in India.
