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March 31, 2001
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Money > Business Headlines > Report March 31, 2001 |
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Honda offers Siel 5 yrs to pick 5 per cent in joint ventureSwati Prasad Honda Motor Company of Japan has granted Siddharth Shriram-promoted Siel Ltd five years to buy back its five per cent stake in Honda Siel Cars India Ltd (HSCIL). Teruo Fujisaki, president and CEO, HSCIL, said that Shriram still has the option to increase his stake in the company from 1 per cent. "Honda has a 15-year old association with Siel Ltd through the power products venture -- Shriram Honda Ltd. And we have a policy of respecting our partners," Fujisaki said. "Siel Ltd has the option of picking up 5 per cent stake in Honda Siel Cars within the next five years," Fujisaki added. Cash-strapped Siel Ltd has been unable to buy back its stake in HSCIL.Meanwhile, the company is gearing up to launch Honda Accord -- a premium car -- around July this year. The car is likely to be priced around Rs 1.4 million. According to company officials, Honda Siel Cars would bring the latest Accord version, which was launched in the US only around January this year. The company feels that the size of the D-segment (comprising cars priced between Rs 1 million and Rs 2 million) would be around 6000 to 7000 cars per annum. At present, there are no cars in the D-segment in the Indian market. However, many car manufacturers such as Hyundai Motor India, Toyota Kirloskar Motors, Daewoo Motors India and Mercedes Benz India have already announced their plans to launch models in the D-segment. Accord is an extremely popular sedan in the US, where Honda sells around 4,50,000 units of the car annually. Honda Siel Cars is investing around Rs 100 million to launch the Accord. The investments will be made primarily in the paint and the weld shops. The company plans to launch the Accord with a 70 per cent import content. According to Fujisaki, if the import duties come down to 20 per cent in the next three years, the excise duties are reduced further, and if the Indian car market grows, his company would certainly be looking at launching more models in India. Talking on the new offerings for India from the Honda stable, Fujisaki said the Honda CRV, a sports utility vehicle, "has potential."
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