When Hero and Honda part ways

Desh ki dhadkan Hero Honda could be in serious need of an electrocardiography. Over the last month,it has been issuing denials or no comments in response reports of a stake sale by Japanese partner Honda Motors.

Desh ki dhadkan Hero Honda could be in serious need of an electrocardiography. Over the last month,it has been issuing denials or no comments in response reports of a stake sale by Japanese partner Honda Motors. Facing the ultimate testthe countrys largest motorcycle maker has to assert its brand identity in a market marked by cut-throat competitionHonda looks set to go solo in India,according to sources.

The separation is unlikely to impact the Hero Group adversely. Having history on its side following the split between TVS Motors and Suzuki Motors in 2002,over the last five years Hero Honda has made a conscious effort to create sub-brands around its high-mileage low-cost bikes. The Fill it,shut it,forget it mantra has worked wonders. The marketing and branding strategy of Hero Honda has been crafted as if the promoters or the highly-paid Hero Honda marketing wizards had taken the eventual split as a given.

A senior official of Hero Honda recently explained to me over a cup of coffee how the companys branding evolved over the years. While Hero Honda continued to be the mother brand,the company was creating product-focused brands around it so as to have a strong brand ecosystema first of its kind in the industry. He said that the company took immense pride in each of its products,assigning them distinct branding and marketing strategies. I tested this contention on a 19-year-old bike hippie. It took him several seconds to name the company that makes the popular bike Hunk.

The exit of Honda may create jitters among retail investors but the company has little to lose in the long run. As our investment banker friends tell us,the Munjals have been assured that the technology pact is going to stay beyond 2014.

With average sales of over 4 lakh units per month,Hero Honda is the undisputed leader in the motorcycle segment. The timely assurance to the Munjals came from a friend and a foe. In an interview with a TV channel,Rajiv Bajaj said that for a consumer,the brand is a Pulsar or a Splendor rather than a Bajaj or a Hero Honda. The message is loud and clear. The Desh ki dhadkan could still continue to win hearts!