Honda to keep Tech support for Hero even after JV exit

The Hero Group and Honda Motor of Japan have reached an understanding on how their separation would be scripted. As per the plan, Honda would divest its 26% stake in the joint venture firm Hero Honda and dissociate itself from brand Hero. Honda would, however, continue to provide technology support to the Indian firm even after 2014, when their extant pact comes up for review.

Honda Motors would exit the JV by divesting its stake either in favour of Hero Group or private equity players, sources in the know said.

This would mean that once the divorce is formalised, the Hero Group could still source technology from Honda but its motorcycles like Splendour and Passion among others would no longer sport the Honda brand. The Hero Group would continue to pay a royalty to Honda for the technology tie-up.

FE was the first to report in its edition dated August 3 that the two firms had run into differences ahead of the renewal of the technology agreement, which comes up in 2014.