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Honda Quite Over The Fate Of Hero Honda
The company cites the issue as a common for all two wheeler companies irrespective of the status, according to the CEO and President of Honda Motor Co. He was quoted as expressing the worry of the supply constraint as the major issue at the time of the hang over between the two companies. Honda is not yet sure about the real consequences of its future in the event of Hero making its exit from the JV. Honda and Hero Motors share 26 percent stake each in the JV Hero Honda, which stands as the world largest two wheeler company.
Of late there are speculation over the continuance of the JV with the Japanese partner claiming more privileges. The dispute may, it is expected, end up with the partners making a divorce so that Honda will be let to go alone in the Indian market. Already Honda Motorcycle and Scooter India is doing business on its individual wing. The JV is in life consequent to the extension of agreement made in 2004 which has validity till 2014.
Without brooding over these speculations, Hero Honda is on the verge of erecting its fourth facility in addition to the ones in Dharuhera, Gurgaon and Haridwar. The net capacity of these three facilities is 50 lakh annual units.
Honda Motorcycle and Scooter India is also making its second facility, at an investment of Rs500 crore, in Rajasthan, which will have the annual capacity of 6 lakh units. This will enable the company to increase the total output to 22 lakhs by Q2 of 2011. After that HMSI will initiate its third facility, it is reported. The report comes amidst the latest analysis of two wheeler sale in India - 11,27,827 units in October making a rise by 50.38% against the performance of the corresponding period of 2009. Of these the sale of motorbikes is 876810 units in October making a rise by 43.31% from the same month of 2009, a record feat.
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