Hero MotoCorp has stopped paying royalty to Honda
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Hero MotoCorp has stopped paying royalty to Honda

As of 30th June 2017, Hero MotoCorp has stopped paying royalty to Honda, a procedure followed since parting ways in 2010.

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The joint venture between Hero Group and Honda lasted from 1984 to 2010 following which royalties to the extent of INR 388.96 crores were paid by the Hero Group to the Japanese two wheeler maker. The last royalty payout was to the tune of INR 18.44 crores for the period 2016-17.

This payment of royalty has now come to an end with Hero MotoCorp deciding to shift all research and development projects to its own unit – The Center of Innovation and Technology at Jaipur in Rajasthan.

Hero MotoCorp Jaipur R&D
Mr. Pawan Munjal, Chairman, MD & CEO, Hero MotoCorp at the company’s new ‘Centre of innovation & Technology’ in Jaipur.

The reason Hero was paying Honda royalty was due to the fact that they were using their technology in their products. But that is no longer the case. Hero has stopped using Honda technology in their products. All their products today use technology developed by Hero engineers.

In addition to this, Hero MotoCorp has planned capital expenditure to the tune of INR 2,500 crores over the next two fiscals towards new product development, digitization and expansion of capacities at the company plant in Gujarat besides the two upcoming plants in Andhra Pradesh and Bangladesh.

Image – ET Auto

Earlier this year, we had reported that about 7 products had gone missing from the Hero MotoCorp website. The reason for that was that some were discontinued, as they were still using Honda tech, some were such that their production was stopped in order to make way for BS4 variants.

Hero MotoCorp has lined up six new BSIV models across segments for the current financial year and has also begun developing BS VI compliant two wheelers which will be introduced much before the 2020 official timeline.

Source Economic Times