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**madhav krishna** · 11-03-2010, 12:03 PM

Originally posted by xionite View Post

high sales figures & huge profit are two entirely different things innit!?!

True. But high sales can result in high profits but high profits need not necessarily require high sales.

Originally posted by payeng View Post

Maybe because in the end its "Hero" which is becoming bigger by the day thanks to "Honda".. One fine day a partner might become just too big for the other to handle.

Well this problem can also be solved by honda purchasing 51% of the shares in hero honda by which it can become equal partner of hero & then there might not be any such problem. Most people have their mindset that hero is a good company so even if honda splits with hero then it can encounter losses since most people will be going for hero.

But only split is not the answer for it. If honda cooperates with hero & hero reciprocates the same then they can create new bench marks which are now restricted due to honda.

Originally posted by NikhilB View Post

From what I understand,

The sales fugures do not result in huge profits because their core strength is in the low-profit/high-volume segment...

I've read earlier that Honda was interested in improving their(HH) position in the >150cc segment (because of the high margins) and was ready with its contribution towards the investment, but Hero was not as interested and didn't want to put up the cash...

Hence, initially HMSI was born with a no-compete clause for a limited amount of time...

Now, since HMSI can compete with HH bikes, it doesn't make sense for Honda to pump money into both ventures and their plan is to seel HH stake and use that money as investment in HMSI...

Note: Just my understanding from following the story since quite some time...

Your post does make sense.

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Hero Honda Tops it again..

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