Japan's Honda Motor Company is likely to renew its 10-year old technical alliance with the Munjals-promoted Hero group for Hero Honda Motors Ltd by another 10 years. This will be done after the present agreement between the two companies expires in June 2004.
"Our (Hero group) intention is to get it extended. There is still two months time. The technical agreement should easily be renewed for another 10 years," company sources said.
The agreement will be renewed even as Honda's 100 per cent subsidiary, Honda Motorcycle and Scooter India, gears up to launch a 150cc motorcycle in the second half of this year.
The Hero Group and Honda have 26 per cent stake each in Hero Honda, the country's largest two-wheeler maker with sales of 2.07 million motorcycles during 2003-04. The company hopes double-digit growth in sales during 2004-05. HMSI is the market leader in ungeared scooters, having sold 310,036 scooters during the year ended March 2004.
The possible renewal of the technical alliance follows strong speculation in the recent past that Honda might not supply two-wheeler technology to Hero Honda after June 2004 and instead focus on HMSI, the world's second-biggest market after China.
Hero Honda and Honda had signed the 10-year technical agreement in 1984, which was extended by another 10 years in 1994. In 1999, Honda set up a wholly-owned