There is a real reason why Hero and Honda parted ways, even though they both became enemies in the two-wheeler market in India

New Delhi. The first company that comes to mind in India when the name motorcycle comes up is Hero. When this was mentioned in the 90’s, the Hero Honda name was adopted. The cooperation between India’s largest bicycle manufacturer Hero and Japan’s well-known company Honda has brought durable and affordable motorcycles not only to India but to many countries. But what happened that this profitable company suddenly collapsed and Hero and Honda parted ways. Now call it Honda’s greed or the way in which Honda is said to have cheated Hero.

Speaking of Hero: The foundation stone was laid in 1956 by Brajmohan Lal Munjal and within 29 years it developed into the largest bicycle manufacturer. In the 80s Hero started exporting its bicycles. Meanwhile, Munjal saw that the motorcycle market was also growing rapidly. During that time there were few options in the name of motorcycles in India. And those that were there were in no way economical. Now Munjal made a plan for it and started working on a plan to launch a motorcycle with better technology in India with a foreign company.

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For this reason, Brajmohan sent a business offer to Honda. Honda was also considering entering the Indian market during this period and liked Hero’s proposal. The two companies struck an agreement in 1984 whereby Hero would make the motorcycle body and Honda would supply the engine. At the same time, another agreement was reached that both companies would never launch their products as competitors.

Now came the bicycle that ruled
Hero Honda’s first motorcycle, the CD 100, was launched in 1985. The motorcycle drove the middle class, or let’s say the working class, crazy. People rode more miles on motorbikes than scooters and it looked amazing too. Seeing the success of Hero Honda, Bajaj also dabbled in motorcycle manufacturing, while Suzuki, Yamaha and TVS also entered the country.

Now came a bad phase, with the rise of the Japanese currency, spare parts became more expensive and it became more difficult for Hero to produce affordable bikes. At the same time, competitors also began to conquer Hero’s market. But the company didn’t want to break people’s trust, so Hero sold affordable motorcycles to people at a loss for a long time. After the exchange rate of the dollar was regulated in 1990, the company got some relief and the period of profits began again. Within a few years, the company’s profits surpassed the $10 million mark.

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So far this story was looking very good, but the time for discord had begun between Hero and Honda. Honda turned out to be a little smarter. In fact, Hero Honda motorcycles have been exported to Bangladesh, Pakistan, Nepal and Bhutan along with India. But Honda exported its bikes to developed countries like America and Russia, and Hero was banned from doing so.

Now Diamonds couldn’t part with Honda even if they wanted to because they only depended on Honda for the engine. Now Hero started making engines. However, Hero did not launch the bike with this motor. When Honda found out about this, the rift between the two companies began to widen.

This gap widened so much that even after the agreement, Honda formed a separate company called Honda Motorcycle and Scooter India Private Limited in 1999 and began marketing motorcycles under the Honda banner. These bikes started to compete directly with the Hero Honda bikes. Honda has also entered the scooter segment with the Activa. Now Honda started to profit from both its company and Hero Honda.

Brajmohan Munjal’s son Pawan Munjal came here and openly opposed this tyranny by Honda. He clearly demanded that Honda stop selling its bikes or break the agreement with Hero. This crack has now started to come out. People started saying that after the split from Honda, Hero would no longer exist. But Pawan had full confidence in himself and his company. Hero and Honda parted ways on December 16, 2010. Honda sold its 26 percent stake in the company to Hero for $1.2 billion. This was one of the biggest deals that happened during that time.

And somewhere behind Honda
After that, Hero launched his other bike. And those who doubted the hero’s ability, the hero stopped in a special way. Hero grew into one of the largest companies not only in the country but also in the world. Today, Hero’s motorcycle production is the highest in the world. On the other hand, Honda’s bikes haven’t been able to show much wonder.

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Tags: car news, bike news, hero motocorp, HONDA