its an extremely sticky situation for the munjals (Hero), while Honda has it really nice, sort of having the cake and eating it.

The Munjals, under the auspices of the Hero Honda JV most probably cannot start their independent foray and experiments with engine /bike development of their own, using resources of the "Hero Honda" entity. Honda will definitely object.

But if they were not to do something of their own, come 2014, and they will either have to completely back out, or accept whatver unpalatable terms Honda lays down.

You have to admire Honda's business acumen and strategy in India.

Also, even though the Hero Honda JV is the most profitable of the bike manufacturers in India at the moment, the Munjals will have it the most difficult, compared to Bajaj and TVS. Kawasaki is yet to enter the Indian market on its own, and Suzuki has just entered with its first mainstream 150 cc offerring. So Bajaj and TVS did not have to compete with their erstwhile partners in the first few years of their going it alone. But for the Munjals, this will be a major problem. Honda is already here, independly setup, already gaining brand value and will be that much stronger by 2014. It will be extremely difficult for the Hero group to go it alone, as compared to what the situation was with Bajaj and TVS.

so the way i see it, if the Munjals intend continuing in the 2-wheeler market post 2014, they will need to set up a separate entity *NOW* which will start working on something new for the Hero group, like the Pulsar for Bajaj and the RTR for TVS. But even this might be considered as a conflict of interest and invite objection from Honda.

So really, the future of the Hero group with respect to contining in the 2-wheeler industry, post 2014, looks pretty bleak to me, unless they can take some initiative now, well in time, before 2014.

i am however, extremely interested on how the existing JV which is a listed company, will be handled.

EDIT:
Devilpulsarian..didn't read your earlier post properly. think i dupicated some points. apologies.

Hero Story 2014!!!

lets see what will happen if HH becomes just "Hero" in 2014???

so in 2014 we will see a new model of Hero Street with electric start and front disc brake probably called Hero Street Pro or with a new enlarged head light with 25cc more called Super Street...

now thats a start...

DevilPulsarian correctly said “Honda is a very shrewd player and knows how to do its business” and other hand Hero does have business sense. They flopped BMW (F650) due to their short sightedness and have entered in another JV with Nissan for small car product whereas Logan is on downward trend from the same parent (Nissan, Renault) group.
Honda being a shrewd player (we know what they did with SEIL) would not allow Hero to setup its own R&D till 2014 and would not allow them to upgrade their product line up as we have seen product upgrade from HH means just changing some stickers here and there.
Honda has learned a lot from JV and would market their products accordingly and eat up market share. Only option left with Hero would be a component supplier for Honda after 2014.

90% of people buying Splendor dont know what HONDA in HERO HONDA. They just buy that bike because its from HERO HONDA.

Yeah, Hope Munjals are reading.

Very much true Riaz.

Eventhough Honda is a shrewd player, with all the experience, Hero will have a substantial and concrete plan for the future. You can feel it in Munjal's words.

Personally, I do not like success of Honda and to become a market leader. It takes ages for Honda to give new technology, that too only where they feel heat from competition. They never take initiatives for introducing new technologies, at least India. Also, they charge exorbitant price for a new technology. Check the prices of CBF Stunner and Honda Jazz.

hero may break its relation with honda ... so it may not get any contribution from honda in R&D etc...
but breaking coordination does not take honda out of the scene
honda still has 26 % shares in a company named HERO HONDA ..
hero also has 26% and rest being public

so being the same level of share holder.... HONDA will always have the right to have internal information including R&D !!!

so HONDA will always know what HH is coming up with for competition
including the engines ... a disaster nothing else
cause if u already know what strategy your opponent is gonna use...
you definitely know how to win ... for example Chess game

and the dark side for honda is that being 26% share holder.... if the prices of the shares decrease... they are also in a loss ... a big time loss of crores

now the thinkable but dont know how reasonable possibilities are that
the munjals buy the rest 26 %..... ohh its going to be a damn uphill task
big big money,,, and even if the munjals spend so much buying the shares... what the heck will it spend in R&D and other things
or if they are lucky... seeing substantial loss... honda sell it to a third party

this way hero will not have the threat of their info already known by a rival

but anyways as people know that honda name in hero honda is so big
that if they withdraw .... share prices will fall and hence i am wondering which guy would be thinking of buying the shares

as munjal said... they are good in sourcing parts and all
but then the question will be from where will they source engines ???
chassis ??? ... hero may have the ability n knowledge because of the experience of so many but still i dont think they have the capability of making engines like honda .. they will have to pair up with a world company like bmw or etc...

only time can tell what will happen lets hope whatever happens is good for us ... also like ravi da said... honda seem too selfish and making a fool out of us ...they only introduce products when they find a threat...
but now they will be on toes because others are not staying quiet
suzuki has already come ..... yamaha is there.... its only time .... honda will have to do more ........ also as honda would loose a share from hero honda ( optional )... it will develop its own prototyes like of karizma ... the vrf230 etc .... i would love to see these kinda machines here

i am typing since a long time now in some sleep.... hope someone reads it

cheers

summed it up perfectly. couldn't describe honda's attitude in the indian market better.

^^The stake of Hero and Honda is 26% each...not 36%. 5 years is still long time, many things can happen, my feeling is,... it's not that easy to break a big brand/reputed/fundamentally strong company out of egos / shrewdness...I strongly hope HH brand lives on...

thanks for the correction buddy... edited it
yeah who knows what might happen... was just giving my opinions

What about this, is this the future of Hero:


This was in 2003:

Such a true point. Most people (not xbhp members) only care that it is a HeroHonda, without knowing the real thing behind it.

Its the time for the Hero's engineers to replenish their knowledge (or they should recruit some...), clean their shirts, shoes...brush teeth. After all, in all these years Hero's engineers tried many variants of colours and stickers they still dont know to build a engine like ,say a tvs xl super.
If they do, why no vehicles from them ?

Hero even tried their own vehicles..but those are all huge flops (readnly mopeds). If the seperation take part, then hero will go down to earth like the kinetic.

In all these years HH thought, whatever vehicle we will provide...people will buy it by closing their eyes...and this happened...because of the honda tag in the badge... but not after 2014.

No. I am not against HH / Hero but these are some facts

> Hero does not have R&D like bajaj or they don't have racing experience like TVS.
> They simply bring honda vehicles and provide stickers and paint in the name of new versions
> In the automotive sense, 2014 is a very very short period. A bike may take many years to develop and engineer. Hero will be proved fatal.
> Hero might need another JV or they must bring other manufacturers products like kinetic brought hyosung.