Wednesday, Mar 12, 2003
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"The technical agreement between Honda and Hero Group which is coming up for renewal in June 2004 will definitely be renewed. We will continue to provide full technical support and assistance for new products," M. Sudo, General Manager, South West Asia of Honda Motor, said. He said Hero Honda and Honda's fully-owned subsidiary Honda Motorcycle and Scooter India (HMSI) would `together' aim for achieving 50 per cent share of the Indian two-wheeler market by 2005 and launch new models which would complement rather than conflict each other's interests. The Munjals-promoted Hero Group had inked an equity and technical agreement with Honda in 1984 which was renewed in 1994 and now comes up for renewal in June next year. The Hero Group and Honda own 26 per cent stake each in Hero Honda, which is the world's single largest motorcycle maker. The remaining shareholding is in the hands of financial institutions and public. Hero Honda Motors' plans to set up a third factory have been put on the backburner and would instead increase production capacity at its existing two plants. The company hopes to complete a feasibility study for setting up the new plant within six months, its Mr. Munjal said. "We have got a Honda engineering team which is helping us to increase capacity at the two plants with the same investment and manpower in the next few months," he said. The capacity at the two plants at Ballabhgarh and Dharuhera in Haryana could be increased to 2.2 million units annually which would take care of the production needs for the next financial year, he said. Hero Honda had last year announced that it was scouting the country for possible production sites for its third plant to cater to the increasing sales. Mr. Munjal, however, said that the third plant could be a complete manufacturing unit or an assembly unit.
— PTI
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