Bike India Team

Big budget deals and makeover in progress

Japanese motorcycle giant Honda is making profit from their ex-joint venture Hero Honda even post break-up. Honda first sold their stake in the joint venture to their partner Hero group for almost Rs 4,000 crore last December. Hero however, is still dependent on Honda for technology. So as an immediate measure, Hero has struck a deal with Honda where the former will produce the Honda engines for their existing products under a licence till June 2014. Hero will pay around Rs 2,350 crore for the same over the course of the deal as royalty to Honda! On the other hand, Hero is now focusing on their solo run in the Indian motorcycle market where they are currently the leaders. It has hired a UK based creative agency Law and Kenneth to create a new brand identity and its communication, along with another international firm Wolff Olins for the same job. Hero wants to revamp their brand completely and though allowed by Honda to retain their name till 2014, want to change the brand name and logo to suit their new strategies.

Words: Piyush Sonsale

BMW bikes to sport Hero gearboxes

Hero Motors recently signed an agreement with BMW Motors, under which the former will become sole supplier of gearboxes to BMW Motorrad, the two-wheeler arm of BMW Motors. Hero would be developing motorcycle gearboxes both for domestic and international markets.

The deal would be valid for a timespan of four or five years, depending on the transmissions sourced for different products by BMW Motorrad. Pankaj Munjal, managing director, Hero Motors, said, “We have developed the gearbox ourselves. Usually, components such as engines and transmissions are made by the company itself, as they involve advanced technology. We have achieved the expertise. BMW Motorrad will source gearboxes from us for products it sells globally.” “That Europe is the best place for sourcing components is not necessarily correct. The landscape is changing. Our transmission business, for one, has been growing over 70% a year for the last few years, he added. 

Hero Motors is part of the Hero Group business conglomerate that is worth around $4.5-billion globally.

Words: Saeed Akhtar