Honda May Call It A Day With Hero Motors

By vicky.in

Published: Monday, December 6, 2010, 15:09 [IST]

A final version might be emerging in the camps of the Japanese motor company Honda, which has a major stake in the JV Hero Honda Motors. There has been speculation over the depart of the partners on various grounds and now it seems certain that Honda may wind up the JV by selling its shares. The company intends to do the business on its own after the break away from the JV, which has been in effect since 1984 after an extension upto 2014. If the deal materializes, Honda will be able to muster 100 billion yen from its sale of share.

The final whistle will blow once the board of directors gives its nod for the break away of the partners. By the process, Hero Motors may get the net share from Honda and the investment funds. Thereafter it will not involve in any activities with Hero Motors instead will become a whole line competitor in the form of Honda Motorcycle and Scooters India Ltd which has the sale volume of 1.2 million units. Till now Hero Honda Motors enjoy the majority share in the two wheeler market with 48 percent and sold around 4.5 million units in the last fiscal.

Under the JV proceedings, Honda avails one third of the net sale figures but still needs total control of operations, which Hero Motors is not willing to give away. After the break away Honda is planning to erect a new facility in Andhra Pradesh state for expediting the delivery mode of its vehicles.

Article Published On: Monday, December 6, 2010, 12:14 [IST]

Read more on: #bikes #hero honda #two wheeler

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