Product Category : Transport Industry

Product Sub Category : Automobiles & Components

Product Description

Hero MotoCorp Limited is an Indian multinational motorcycle and scooter manufacturer headquartered in Delhi. It is one of the world's largest two-wheeler manufacturer and has a market share of about 46% in the Indian two-wheeler industry.[3][4] As of 27 May 2021, the market capitalization of the company was ₹59,600 crore (equivalent to ₹700 billion or US$8.4 billion in 2023).[5] [6]

The major shareholders of the company include The Munjal family: (40%), the Government of India (through public sector banks):(15%) and Tata asset management: (0.8%).

History

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Hero Honda started its operations in 1984 as a joint venture between Hero Cycles of India and Honda of Japan.[7][8] In June 2012, Hero MotoCorp approved a proposal to merge the investment arm of its parent Hero Investment Pvt. Ltd. with the automaker. This decision came 18 months after its split from Hero Honda.[9]

"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. [10] Munjal family and the Honda group both owned a 26% stake in the company. [11]

During the 1980s, the company introduced motorcycles that were popular in India for their fuel economy and low cost. A popular advertising campaign based on the slogan 'Fill it – Shut it – Forget it' that emphasized the motorcycle's fuel efficiency helped the company grow at a double-digit pace since its inception. In 2001, the company became the largest two-wheeler manufacturing company in India and globally.[3] It maintains global industry leaders to date.[3] The technology in the bikes of Hero Motocorp (earlier Hero Honda) for almost 26 years (1984–2010) has come from the Japanese counterpart Honda.[12]

Termination of Honda joint venture and the renaming

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Hero Honda Passion

Hero Karizma R

By December 2010, the board of directors of the Hero Honda Group had decided to terminate the joint venture between Hero Group of India and Honda of Japan in a phased manner. The Hero Group would buy out the 26% stake of the Honda in JV Hero Honda.[13] Under the joint venture, Hero Group could not export to international markets (except Bangladesh, Nepal and Sri Lanka) and the termination would mean that Hero Group could now export. From the beginning, the Hero Group relied on their Japanese partner Honda for technology.[14]

Honda exited the joint venture through a series of off-market transactions by giving the Munjal family, which held a 26% stake in the company. Honda, wanting to focus only on its independent fully owned two-wheeler subsidiary, Honda Motorcycle and Scooter India (HMSI), exited Hero Honda at a discount and get over ₹6,400 crore (equivalent to ₹140 billion or US$1.7 billion in 2023) for its stake. The discount was between 30% and 50% to the current value of Honda's stake as per the price of the stock after the market closed on 16 December 2010.[15]