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Hero MotoCorp royalty payment to Honda on a decline

Hero Jaipur R and D center
 

Hero MotoCorp is set to up the ante with fresh investment, new research and development and introduction of a fresh lineup.

With Hero MotoCorp going solo since its parting ways with Honda in 2010, extensive plans are on the cards to enhance market share with launch of 12 new models promised over the next 9 months.

Hero MotoCorp has also planned investment to the tune of INR 3,000 crores in research and development of 200cc and above motorcycles while new export markets such as Nigeria, Mexico and Argentina are also being surveyed.

Hero Splendor iSmart 110 Red-2

Hero MotoCorp recently launched the new Splendor iSmart 110, the company’s first indigenous bike at INR 53,300. The company looks forward to a good monsoon after two years which will allow the company to seen more positive results especially from rural areas while will have a positive impact on market share.

Hero MotoCorp had to contend with competition from Honda with the Activa scooter grabbing all the attention with highest sales in the past 6 months, surpassing sales of the Honda Splendor.

Hero_Honda

Hero MotoCorp with a current share of 39% in FY16 seeks to enhance market share by the end of this fiscal. The company has gained in stock prices since the introduction of the Splendor iSmart 110 while the company has also inaugurated a new research and development center in Jaipur earlier this year at an investment of INR 850 crores which ends the company’s dependence on Honda for technology.

The company will be phasing out products on which it pays royalty to Honda with the Maestro being the first of such products. Maestro Edge was launched in September 2015 and three more products, Impulse, Ignitor and Passion XPro are set to be hacked from company portfolio. The royalty paid by Hero to honda has declined by INR 40 crores in FY16 to INR 80 crores. This will decline even further in FY17.

Hero HX250R – Photos

via business-standard


 

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