Hero Honda’s Profit Drops by 20%
Hero Honda Motors Limited, India's largest two-wheeler producer, reported its biggest fall in every quarter profit in more than 3 years as raw materials rates eroded gains from advanced sales. Hero Honda MD Pawan Munjal said- "I do foresee margins to be under pressure in short term, "For the last few months, the industry has faced many issues of limited supply of rising input costs & components." Bike Manufacturer said it spent 44% more on rubber, steel & other materials in the last quarter such as economical growth in China & Indian market improved commodity prices. Raised prices of its bikes by as much as Rs 1500 in December month. Fight may hike for the Delhi based manufacturer as Honda Co works to expand its completely owned Indian unit after selling its 26% stake in Hero Honda. Gaurant Dadwal said Increasing commodity prices have plainly dented this quarter's profit," Mumbai analyst at Jaypee Services Limited., who has a 'sell' rating on the stock. "With their rate growth in Dec it is possible that they will be able to regain their margins."
Hero Honda Executes Licensing Agreement
Hero Group To Make 3-Wheelers
After their split from Japan based Honda Motors, Hero Group is looking to go into in previously untouched territories. As reported earlier, the corporation started exploring the idea of making Diesel bikes for Indian market. Now, according to company’s official statement, Hero Group is scheduling to enter 3-wheeler business soon. According to company sources, Hero Group may come up with 3-wheeler passenger carrier (auto-rickshaw) first, followed by a commercial goods mover.
The plan was discussed with the vendors in Delhi, according to the same sources. “The group is examining the option of re-engineering its bigger two-wheeler engines to make three-wheelers. We have been asked to prepare for the admission into three-wheelers and other segments,” said a Delhi-based vendor who attended the meeting. Executives from over 50 companies, which supply crucial parts to Hero Honda, took part. The Hero group will start implementing these plans once it signs a definitive agreement with Honda Motor Company. The Hero Honda spokesperson said there were no immediate plans to enter the three-wheeler segment. Three-wheelers are referred to as auto-rickshaws in India. “Under the proposed new arrangement, several opportunities may exist in terms of new segments and product categories, but at present there is no such plan on the anvil,” the Hero Honda spokesperson said.
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