Price war might start after divorce of Hero-Honda

A price war is expected in the two-wheeler industry after the divorce between Hero and Honda. Hero Honda is the worlds largest two wheeler maker company and India's numero uno firm with the production of 3.2 million two wheeler per year. Now this joint venture is splited. The indigenous company Hero want to market its position on the top but it will face intense competition with other domestic companies like TVS, Yamaha, Suzuki and new entrant Mahindra Two wheeler. You can also expect some discounts, exchange offer and many more as well.

On other hand, Honda Motorcycle and  Scooter India, the country’s fourth-largest two-wheeler maker, can now take on the market leader in every segment, and going to launch all segment two wheelers in India, the company is planning to introduce its cheapest bike with expected price of Rs. 27000 in India. The company has already launched a 110cc bike that is Honda CB Twister to test the market response and it was fantastic.

In Hero-Honda venture, Honda's stake is 26 percent; it will get whopping Rs 8700 crore. After split both the company wants to back-left each other and it will be a battle between both companies, as per market pandits.

Hero Motor is authorise to use Honda name till 2014 and the company has 4500 dealers in pan India while Honda wants to increase its dealership numbers in the country.

Suzuki Motorcycle India vice-president (marketing & sales) Atul Gupta quoted as saying to a leading business daily, “The split in Hero Honda partnership may be affect to customers reliability."

A new battle will be started among rivals like Bajaj Auto , TVS Motors, Yamaha Motors, Suzuki Motorcycle India and new entrant Mahindra 2 Wheelers to grab most of the market share which is open now for every two-wheeler company.