Hero decides to drop Honda tag from bikes starting 2012
Co wants to acquire new identity at the earliest instead of waiting till 2012
Soon brands like Karizma and Splendor, the country’s largest selling bikes will come without the Honda tag. Hero MotoCorp will drop Honda brand from its bikes from early 2012. According to the agreement signed between the erstwhile partners, Hero can use the Honda brand till 2014. It is understood that the former now wants to acquire a new identity at the earliest in order to maintain its leadership position.
Brijmohanlal Munjal-owned Hero MotoCorp is currently evaluating the modalities as to how the brand change on its largest selling bikes will impact its sales in both short and the long term.
“As long as the company uses the platform for its large selling bikes and maintain the price point, the brand will not matter for general public,” a company official said.
Bikes that are in the pipeline would be launched under the Hero MotoCorp brand. Last week, the company launched a bike (Impulse) and a scooter (Maestro) in London under the Hero MotoCorp brand.
Analysts believe that it makes sense for the company to drop the Honda brand sooner even if they have time till 2014. “The company has a huge vendor base. The dealership has pan-India penetration. A mere change in brand would not hamper its sales. On top of that the company has invested a lot on the new brand name and will invest substantially on technology building over next few years,” a Mumbai-based analyst said.
Six months after breaking away from the 27-year-old joint-venture, Hero MotoCorp (formerly Hero Honda) last week unveiled its new brand identity with a commitment to set up two new manufacturing units in southern and western parts of the country.
Hero MotoCorp MD Pawan Munjal said that Hero MotoCorp is also going to forge alliances with different global players for design and product development. “The investment in the next five years will be more than what we made in the last 27 years with Honda,” he said. In the last 27 years, Hero Honda has pumped in over $1 billion. He said that the company would raise the funds through internal accruals.
