Hero To Stop Paying Royalty To Honda

Hero MotoCorp and Japanese automobile giant were in collaboration up until 2010. Their partnership lasted for a surprisingly 26 long years. The company when the Indian and Japanese manufacturer were in business together was called Hero Honda and was the delight of most Indian commuters.

The Munjal family who own Hero Cycles Ltd. bought 26% of Honda's stake in the Indian company. They are the current owner of the company and had opted to rename the company to Hero MotoCorp. The Munjal company purchased the 26% shares for INR 3,842 crore. However, they had opted to pay Honda in four installments before June, 2014.

Now the Munjal family are close to clearing the last installment and thus, their company can stop paying royalty fees to the Japanese manufacturer. Hero MotoCorp will finally be able to report higher profits than before. The Indian manufacturer is expected to save roughly around INR 415 Crore.

Hero MotoCorp currently sells the Passion xPro, Impulse, Ignitor and Maestro. These products were developed and manufactured with the help of the Japanese giant. So the Munjal family will still have to pay a nominal royalty due to these products that are offered. Currently the Passion xPro and Maestro scooter are selling well in the Indian market and Hero MotoCorp will have to shell out a decent amount of royalty to Honda.

Hero MotoCorp can still rejoice as a significant amount of money will be saved. The Indian manufacturer is expected to use the saved profit to expand its base by setting up new facilities in international markets. They will also utilise their profits for improving and coming up with new products for their range. All in all the good times for Hero MotoCorp are here and we wish them all the very best with their future products.

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