The Hero-Honda Split

Munjal’s Hero Group’s decision to break its joint venture with Japanese company Honda was formalised on 16 December 2010. The 26-year-old partnership drew to an end with the Hero Group declaring to buy the entire 26 per cent stake held by the Japanese automaker, Honda in a phased manner.A memorandum of understanding (MoU) between the two parties for a new licensing agreement was signed. Under the new terms of the agreement, the Hero Group will have the freedom to go global and export across segments to new international markets. The Hero Group did not previously enjoy this facility. The agreement will enable the Hero Group to expand on R&D and product development, besides looking at manufacturing facilities abroad. Also the company will be able to acquire technology from any foreign firm. Honda will also grant new licences for new products which will be produced and sold under a new brand name from now on.