Hero Honda is more than 25 years old. Hero is the Indian company and Honda is the japan company. After merge the company it became the hero Honda company. Hero Honda is one of the best motorcycle companies of India. This business has been extremely successful in India in terms of sales. Its goodwill is also good not only in India but also in all over the world. It was established in 1984 at Dharuhera. It is split in the end of 2010. After the split the Munjal family will buy Honda Motor’s 26% stake for around $ 1billion. This valuation may change as per market forces.
Two reasons for splitting:
- One is the increasing cost of royalty and technology.
- Second, the growing presence and market share of Honda Motorcycle & Scooter India (HMSI), a 100% subsidiary of Honda.
Hero and Honda combine or merge with each other and make hero Honda Company. Its gain more and more profit. It is the best company not in India but in all over the world. But reason of split is that hero wants to change the technology. But other (Honda) is not agreed. So, that it is the main reason for splitting.
after spliting:
Hero company
How Hero will be more affected without Honda?
After Honda exit from hero Honda, Hero Company suffered from various problems like: brand name and goodwill of the company. Goodwill is the reputation of the business.it is very easy to describe the meaning but is very difficult to maintain the goodwill of the business. After splitting, hero will focus on export bikes and scooters. Hero will lose the value of the market share. When value of the share is decreased then competitors immediately increased their market share like: Honda, autos. Hero will be more affected without Honda