Big change in a household name...

I was really surprised when I came to know about the parting of ways by the Honda and the Hero group. It started out as a humble merger of the Hero and the Honda group around 25 years back, producing bikes which were otherwise phenomenal in changing the face of two wheeler market in India. It was THE company, Hero Honda, which dared to stand in Bajaj's way in two wheeler competition. It has produced best selling bikes - CD 100 and Splendor. All was good till Thursday 16th December 2010. Another big change in Indian automobile history after scrapping of Bajaj scooter and Maruti 800.

When it comes to the domestic Hero group, Mr. Pawan Munjal, CEO and MD, says that the Hero Group will buy 26% stake in Honda by raising debt initially. The company will be using Honda name till year 2014. Unless the world really is going to end in December 21st 2012, it's probably safe to say that Hero Honda will still be a household name till 2014. The downside is, the Hero group will be facing a tough challenge of protecting its whooping 60% market share in the motor-cycle segment along with the largest sales network of over 4,500 dealers.

On the other hand, Honda is planning to reinvest in the Indian two-wheeler market, which is world’s second largest market for motorcycles after China. At present, Honda Motorcycle & Scooters India is the fourth-largest two-wheeler maker and the largest scooter maker in the Indian market.

Let's see where the things stand for now. I enter a partnership with a guy and do a considerable business which is really successful, and I do that for 25 years. Now, I split up with him, and make my own way. That's precisely what the Honda intended to do all along. So much so, Mr. Fumihiko Ike, MD and COO Regional Operations at Honda Motors says, “The main objective of setting up this company 26 years ago was to explore the Indian market which has changed considerably since then”. Talk about a proper undercover reconnaissance !!! 

Of course, nobody would have thought of a merger with a big company like Honda and a lesser known company like Hero at that time. Based on where the Honda and the Hero-Honda merger stand, I'd say Honda could have as well bought Hero any day. If they had their way, the samurai's from Honda could have beheaded the royal warriors of Hero. RIP Hero-Honda. We will miss you.