Hero Honda: Parting Ways?*

Abstract:

In 2010, there were speculations that Hero Group and Honda Motors, after an alliance of 25 years, were heading for a split. Analysts wondered whether after the split, Hero’s brand would retain the same charm it had when the partners were together.

Issues: » Joint developments. » Joint ventures. Introduction Over the years, Hero Honda Motors Ltd. (Hero Honda) had carved a niche for itself not only in the Indian two-wheeler market but in the global market as well. With its key strategy being innovation, the company had succeeded in building a robust product range across various categories, venturing into new markets, expanding its network, and investing in brand building activities. However, in 2010 speculations were rife that the alliance that had ruled the two-wheeler segment in India for more than two decades was coming to an end with the two companies in the joint venture heading for a split...

Questions for Discussion:

1. There have been many joint ventures between Indian and foreign players but very few of them have been long-term ventures. Is this just a co-incidence or parting ways after a period of time is seen as a necessity by the players involved? Discuss.
2. In view of the split, do you think it will be possible for either the Hero Group or Honda Motors to retain the power associated with their respective brand names?
3. Is it true that associating with a foreign brand adds value to Indian brands? Analyze whether a split will have any impact on the sales of Hero or Honda brands.

Key words:
Joint development, joint ventures, Hero Honda, Honda, Hero Group

* This caselet is intended for use only in class discussions.
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