Hero MotoCorp
Hero MotoCorp Ltd.,formerly Hero Honda, is a an Indian Multinational motorcycle and scooter manufacturer based in New Delhi India. The company is the largest two-wheeler manufacturer in the world, and also in India, where it has a market share of about 46% in the two-wheeler category. The 2006 Forbes list of 200 world's Most Respected Companies had hero Honda Motor ranked at 108. On 31st March 2013, The market capitalisation of company was rupees 308 billion.
Hero Honda started its operations in 1984 as a joint venture between Hero Cycles of India and Honda of Japan. In June 2012, Hero MotoCorp approved a proposal to merge the investment arm of its parent Hero Investment Pvt. Limited with the automaker. This decision came 18 months after its spilt from Hero Honda. "Hero" is the brand name used by the Munjal brothers for their flagship company, Hero cycles Ltd. A joint venture between the Hero Group and Honda Motor Company was established in 1984 as the hero Honda Motors Limited at Dharuhera, India. Munjal family and Honda group both on 26% stake in the company.
During the 1980, the company introduced motorcycles that were popular in India for their fuel economy and low cost. A popular advertising campaign based on its slogan 'Fill it- Shut it - Forget it' that emphasised the motorcycles fuel efficiency help the company grow at a double-digit pace since inception.In 2001 , the company became the second largest two-wheeler manufacturing company in India and globally. It maintains getlobal industry leadership to date. The technology in the bikes of Hero Motocorp for almost 26 years has come from the Japanese counterpart Honda.
The termination of Honda Joint venture
By December 2010, the board of directors of Hero Honda Group had decided to terminate the joint venture between Hero Group of India and Honda of a Japan in a phased manner.The Hero Group would buy out the 26% stake of the Honda in JV Hero Honda. Under the joint venture Hero Group could not export to international markets and the termination would mean that Hero Group could now export. From the beginning, the Hero Group relied on their Japanese partner Honda for the technology in their bikes.
the Japanese automaker exited the joint venture through a series of off-market transactions by giving the Munjal family- which held a 26 % stake in the company -an additional 26%. Honda, wanting to focus only on its independent fully owned two-wheeler subsidiary- Honda Motorcycle and scooter India (HMSI)excited Hero Honda at a discount and get over 64 billion for its stake .
The rising differences between the two partners gradually emerged as an irritant. Differences had been brewing for a few years before the split of a variety of issues, ranging from Honda reluctance stands to fully and freely share technology with Hero out to the Japanese company another major edited from Honda was the refusal of Hero Honda to merge the companies spare parts business with Honda new fully owned subsidiary HMS.
as per the arrangement it was a tool deal in the first part the munjal family led by brijmohan lall munjal group form an overseas incorporated special purpose vehicle to buy out on the entire stake which was backed by bridge loans this SPB was eventually through open for private equity participation and those in the fray included warburg pincus kohlberg kravis Roberts tpg Bain capital and group
Formation of the new company
The name of company was changed from Hero Honda Motors Limited to Hero MotoCorp Limited on 29 July 2011. The new brand identity and logo of Hero Motocorp were developed by British firm Wolff Olins.The logo reveal on 9 August 2011 in London, to coincide with the third test match between England and India.Hero MotoCorp can now export to Latin America, Africa and West Asia. Hero is free to use any vendor for its components instead of just Honda-approved vendors.
On 21 April 2014, Hero MotoCorp announced its plan on a rupees Rs2.540 billion joint venture with Bangladesh Nitol-Niloy Group in the next five years to set up a manufacturing plant in Bangladesh. The plant started production in 2017 under the name "HMCL Niloy Bangladesh Limited". Hero MotoCorp owns the 55% of the manufacturing company and rest 45% is owned by Niloy Motors. Hero also updated its 100cc engine range in 2014 for 110 cc bike accept Hero Dawn.
Written by - Ankit Kunwar
