53681867 Hero Honda Kinetic Case Study Essay

Submitted By Abhishekpawar87Y
Words: 7830
Pages: 32

Title of the Case:

Hero Ultra: Joining Hands for Ultra Success

Name of the Author:



Veer Narmad South Gujarat University

Postal Address:

Department of Business & Industrial Management
Veer Narmad South Gujarat University
Udhna-Magdalla road
SURAT – 395007.

Tele / FAX:

0261 – 2211412



Dr. M. V. Sidhpuria
Dr. Renuka Garg

0261-2256070 (Fax)

mvsidhpuria@yahoo.com kvprgarg@yahoo.co.in Hero Ultra: Joining Hands for Ultra Success
The Joint venture between Honda Motors - Japan and Hero group made it a real “Hero” of two-wheeler industry and made Hero-Honda Motors the world’s largest two-wheeler company. When the joint venture agreement between Hero group and Honda Motors
Company – Japan came up for revalidation in the year 2004, Honda Motors and Scooters
India Ltd announced to enter the motorcycle market. This brought the management of Hero group to re-think their strategy. In order to overcome the emerging challenges, the management thought it appropriate to forge strategic partnering with a firm that brings to the group a technology that is futuristic, eco-friendly and has a promising future. Hero group launched its first electric vehicle in collaboration with Ultra Motors of UK in the middle of
2007 and achieved a landmark sale of 10000 electric bikes within 4 months of its launch. The case attempts to unfold the importance and relevance of cooperative strategies in Indian automobile industry especially two-wheeler industry and unveils the strategic actions initiated by the Hero group to uphold its leadership position in two-wheeler industry with the help of strategic alliance.


Hero Ultra: Joining Hands for Ultra Success
“India is an important market for us and offers an opportunity in Electric two wheelers. We have found a valuable partner in Hero Group in creating this new opportunity and tapping its potential.
Efficiencies of both the companies in marketing and manufacturing respectively, proved to be a strong catalyst for sales and achieving the magic figure of 10,000 units. We will continue to innovate and grow with our current and future customers.” Commented Mr. Ian Woodcock, Chairman, Ultra
Motors Company, a technology partner of Hero group – world’s largest manufacturer of two-wheeler on the occasion of celebrating the landmark sales of 10,000 units of electric two-wheelers in India in
November 2007 1.
Hero Cycles Limited had earlier in October 2006, signed a Technical Collaboration-cum-Joint
Marketing Agreement with Ultra Motor Company, to produce and jointly market a range of “Hero
Electric - Ultra Powered’ Electric Two Wheelers in India. Both Hero Cycles Limited and Ultra Motor
Company wanted to understand the strength of the market and hence the Technical Collaboration was the first step towards entering the Indian market. In the last six months both the companies understood the strength of the market, witnessed a good response and felt it is the right time to combine resources and leverage the market potential.
Hero Exports Private Limited (HEPL), an affiliate of Hero Cycles Ltd. (HCL), which is part of the $3billion Hero Group, has entered into a Joint Venture with Ultra Motor Company (UMC), a Global
Electric Vehicle company based in UK. The new venture, to be called Hero Ultra Private Limited, will have equal shareholding by the two companies2. Under the aegis of the new venture, Hero Cycles has launched two new models ''Velociti'', an electric scooter with extra speed, and ''Optima''- an electric scooter with extra range priced between INR 29,000 and 34,000. The existing range of the company’s six ''Hero Electric Ultra Powered'' two wheelers is priced between INR 14,400 and 27,900.
"Hero Cycles and Ultra Motor have shared a strong partnership under the technical collaborationcum-joint marketing agreement and this joint venture is a natural extension of that relationship," said
Vijay Munjal, Managing Director, Hero Cycles Limited.3 "Both the companies have