Honda Motor Co and Hero Group have decided to part ways in the Indian market. The news has been doing rounds since a long time and now the word is that Honda will sell its complete 26 percent stake in the joint venture to Hero Group. It was also rumoured that Honda will continue to provide technical support to Hero Group till 2014 but as per the recent reports, such is not expected to be the case.
Honda will now focus on its wholly owned subsidiary in India – Honda Motorcycles and Scooters India Limited. HMSCI is India’s fourth largest two-wheeler manufacturer with sales of 1.2 million units. On the other hand, Hero Honda till date accounts for 48 percent market share in the country. Hero Honda also accounts for nearly one-third of sales for Honda in global sales.
Honda wants complete control over its operations in India which is the second largest motorcycle market in the world after China. Honda intends to introduce new variants and implant new strategies for its products as per the changing market needs without waiting for any partner to response and agree with its plans.
Thus, Indian market is now set to witness even more fierce competition than the yesteryear with two age-old giants facing each other in the Indian market. Close at heels are Bajaj Auto, TVS and Yamaha which are not going to make it any easier either. Customers in India are definitely at the winning end, no matter which way the tables turn.
