Honda to receive 14 bn yen from HMML as licencing royalty

Honda Motors, Japanese auto giant, will receive 14 billion yen (about Rs 2,450 crore) from Hero motors Pvt. Ltd for licensing till 2014. This big amount will be paid out to Honda for a new licensing agreement by HMML and a deal has been done between Hero Group and the Japan based Honda Motors.

Remember, Hero Honda has parted away in Hero and Honda groups. Now Hero Group is to pay out Rs. 3,814.83 core for Honda's 26 per cent dividend in the joint venture. Before it Honda was receiving 2.7 per cent to 2.8 dividend from Hero Honda as royalty payment. But now it has been closed and only licensing fees will be received by the two wheeler giant.
 

Hero Honda is the largest two-wheeler manufacture of the world and Indian two wheeler market is dominated by it. Presently the company includes popular bike models in its Indian stable like Hero Honda Splendor, Hero Honda Passion Pro, high-end model Hero Honda Karizma, etc. Since a long time, there was no new bike model launched in the market; only re-freshed versions of the its popular bikes are being offered. As 150cc Hero Honda CBZ Xtreme is the new bike which has recently got new look and some technical features.
 

Honda Motor reported in a statement that HHML and Honda have signed a new licensing agreement and as per its rules Hero Honda to continue producing, selling and servicing its current products and the agreement will be valid till 2014. Meanwhile HHML Chief Financial Officer Ravi Sud added that this agreement will last till June, 2014 and after that any royalty payment will not paid to Honda.
 

On the the hand, Honda has its subsidiary in Indian market with name of Honda Motorcycle and Scooter India which is doing well. HMSI includes entry-level 110 cc bike Honda CB Twister to 250cc Honda CBR 250R and Honda CBR 1000R. While Indian scooter market is dominated by Honda Activa which captures 45 per market share of total Indian scooter market.