Hero vs Honda
Hero vs Honda
The amount of research regarding the topic “Hero vs Honda” is so vast. The topic is new; it is as about the merging and formation of the organizations. The companies after walking hand-in-hand for 27years, are now standing head to head in Indian two-wheeler market. Now their marketing strategies to earn market share. This study verifies The marriage between the mega corporation from Japan Honda and the world’s leading maker of cycles Hero. It was a remarkable union. One that stood the test of time. The alliance started in the year 1984 and was intact for more than 25 years (ended in the year 2010.
Some of the reasons that The breakup of Hero Honda after a marriage spanning 25 years sent shockwaves across the entire Indian auto industry. Hero Honda had brought the concept of a two–wheeler in India’s collective consciousness. It is also regarded as the largest manufacturer of two–wheelers in the world. Then why the breakup of such a uber successful marriage ? The reason cited includes disagreement over various issues and deals.
Hero Honda …no ! It’s Hero vs. Honda. There was a time when i used to compare the sales figures of Hero Honda with Bajaj Auto. Both were arch rivals as the competition between the two groups in two-wheeler segment is very stiff. But who knows about the biggest rivalry yet to come. Two wheeler segment has got one more competitor just because there is something unexpected
happened in the recent past. It was 2010 when i first heard the news about Hero motocorp and Honda Motorcycles and Scooters (HMSI) rift. And then the biggest news appeared on different news channels, Newspapers, Magazines and on Internet somewhere in October 2010
But then the ground situation points to something different
The Honda group has invested a lot into technology and R & D because at the same time in the west especially the European region, the movement has been onto the Euro – V norms. Now this up gradation means greater investment in technology and innovation. The fact of the matter is that at the end of the day Honda and Hero Group are competitors. And therefore Honda India is vary of sharing this technology with the Hero Group. This would have also resulted in greater royalty payments towards Honda which has already impacted the profitability of Hero Honda for many years.
The real reason behind Hero Honda Breakup.
it’s all about competition?
Yeah obviously. Divorces happen if either of the partners have issues with each other. And in this case Honda has finally realised that the Hero Group is nothing but competition. In a country where the disposable income is continuously increasing with the economy growing at more than 8.5% p.a. and new players coming in everyday, which company would want to lose out on this market?
Since the name Hero – Honda can be used upto 2015, I am sure it gives a great chance for both – the Hero Group as well as Honda India to develop their respective strategies. With the infrastructure already there and continuous research and development, both these organizations would be really successful in the long run. It all depends on how fast they are able to leverage their individual identities and move out of the “Desh Ki Dhadkan” bit!
SURVEY ANALYSIS AND FINDINGS
I performed the survey with various news , articles, websites.
These are like the after effects after a massive earthquake. The after -effects at the end of a long relationship also affects the society in some way to other .Something similar happened in this case also. The shares of both Hero motocorp as well as HMSI falls negatively and sales were also affected .
People were not ready to buy the bikes of Hero because the technology of Honda was missing and same is the case with Honda as buyers didn’t find any Indian connection and engineering which they previously get from Hero.
Recovery by Hero
1. Hero Motocorp returned or launched its new positioning and brand slogan in August 2011.HUM MEI HAI HERO, brought to life by music maestro A.R Rahman,has been a positioning masterstroke 2.
3. Hero’s new launches “Impulse,” Ignitor and Passion Xproduring Auto expo 2012 was done to make the group’s presence felt among the buyers. 4. The sales of bike started rising up in the end of 2011 after a new launch. 5. Hero’s presence in rural market (Hero cycles) helps the group to expand and sell their bikes in villages also.
Recovery by Honda
Difficulty for Honda is much bigger as Honda as a single Identity is not a popular brand with the masses except their only successful launch-Unicorn
• Honda’s simultaneous launch of its India specific brand identity ‘Sach kar denge Sapne’last year shows its own ambitions for the Indian market. • Auto expo 2012 saw HMSI unveil 7 new India specific two-wheelers including the much awaited 110cc mass motorcycle Dream Yuga, sporty performance bike CBR 150R, and the VT 1300CX and CBR 1000RR Fire blade in big bikes portfolio.
Honda is clearly betting on its modern technology and strong R & D to help increase the volumes in the short- run, while Hero’s is making the best possible advantage of being and old INDIAN brand ,the stage is set for a clash of the titans in 2012.
BRAND WAR IS ON NOW
The rising differences between the two partners that gradually emerged as an irritant. Differences had been brewing for few years before the split over a variety of issues, ranging from Honda’s reluctance to fully and freely share technology with Hero (despite a 10-year technology tie-up that expires in 2014) as well as Indian partner’s uneasiness over high royalty payouts to the Japanese company. Another major irritant for Honda was the refusal of Hero Honda (mainly managed by the Munjal family) to merge the company’s spare parts business with Honda’s new fully owned subsidiary Honda Motors India (HMI)
Honda will continue to provide technology to Hero Honda motorbikes until 2014 for existing as well as future models.
The friends have parted ways. They are now Hero MotoCorp and Honda Motorcycle & Scooter India Pvt. Ltd.
1. ^ Munjal family & Honda Motor to discuss Hero Honda split today – The Economic Times 2. ^ a b c Hero, Honda split terms finalized – The Times of India 3. ^ Hero approves Honda’s exit from Hero Honda, India Infoline news service 4. ^ Higher royalty for Honda in split from Hero – Hindustan Times 5. Indias Business Blog www.Track. In.com
6. www.Marketing Age.com
University/College: University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Date: 12 January 2017
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