The breakup of Hero Honda after a marriage spanning 25 years sent shockwaves across

the entire Indian auto industry. Hero Honda had brought the concept of a two–wheeler in India’s
collective consciousness. It is also regarded as the largest manufacturer of two–wheelers in the
world. Then why the breakup of such a uber successful marriage ? The reason cited includes
disagreement over various issues and deals.

But then the ground situation points to something different

By 2015, the Bharat IV emission norms would have to be implemented by all the two –
wheelers. These are very different from the Bharat III norms being employed today. Earlier this
year the norms were upgraded from Bharat II to Bharat III for two – wheelers while to BS – IV
for certain cars and SUVs.

The Honda group has invested a lot into technology and R & D because at the same time
in the west especially the European region, the movement has been onto the Euro – V norms.
Now this up gradation means greater investment in technology and innovation. The fact of the
matter is that at the end of the day Honda and Hero Group are competitors.
 And therefore Honda India is vary of sharing this technology with the Hero Group. This
would have also resulted in greater royalty payments towards Honda which has already impacted
the profitability of Hero Honda for many years.

So it’s all about competition?

Yeah obviously. Divorces happen if either of the partners have issues with each other.
And in this case Honda has finally realised that the Hero Group is nothing but competition.

In a country where the disposable income is continuously increasing with the economy
growing at more than 8.5% p.a. and new players coming in everyday, which company would
want to lose out on this market?

Future?

Since the name Hero – Honda can be used upto 2015, I am sure it gives a great chance for
both – the Hero Group as well as Honda India to develop their respective strategies. With the
infrastructure already there and continuous research and development, both these organizations
would be really successful in the long run.

It all depends on how fast they are able to leverage their individual identities and
move out of the “Desh Ki Dhadkan” bit!

The split between Munjal group owned Hero group and Japan’s Honda is suspected to
start a price war in the 2 wheeler segment with other manufacturers offering discounts and other
freebies to attract customer attention. With the weakening of the brand image of Hero Honda this
is the best time that automobile manufacturers can increase their market share thereby putting
Honda on the backfoot.

The key criteria here is the demotivation that Hero honda dealers have had to face due to
the split. Thus these channel dealers are more likely to switch their brand loyalty. On the other
hand, The japanese 2 wheelers definitely have an advantage over Indian manufactured 2
wheelers mainly because of advanced engineering. In the past too, the poaching of indian
distributors by Japanese companies has been a major problem in the automobile market.
 Thus with Honda directly concentrating on the 2 wheeler marketing with its indian
counterpart – Honda Motors and Scooter India, the competitors can expect a further smart move
from Honda itself. Honda has now been pushed against a corner and because of its deep pockets
it may respond strongly to maintain its dominance in the Indian market.

Other Updates on the Hero – Honda Split

Because of non disclosure of the exact amount paid by Hero to buy off Honda’s 26%
stake, there is unrest in the minds of analysts. A number of companies are requesting SEBI to
keep a watch on the deal.

Current Hero Honda dealers feel that the split will drive further sales for Hero group till
the time Honda doesnt come up with challenging models in the Indian market. A mumbai dealer
feels that because Honda has lesser models floating in the market, there is still some time for
Honda to launch completely and as of now Dealers should support the Hero group which has
maintained its brand since years.

Hero Honda: Brand power

Recommendation: Hold

B. Krishnakumar

Aided by its strong brand image and proven product quality, Hero Honda has
successfully exploited the growing demand for motorcycles.

Backed by the technical support of the global major Honda, the company is No. 1 in the
four-stroke motorcycle segment.
 Hero Honda's Splendor range of motorcycles is the country's top selling brand. It has
been conservative in new product launches, instead coming out with variants of its existing
range. Splendor, Sleek, Street and CBZ were the major model launches of the 1990s.

Of these, CBZ was the most recent launch and has steadily gained market acceptance.
Positioned at the premium end, the CBZ range offers a combination of power and fuel-
efficiency. Recently, Hero Honda launched cosmetic variants of its top-selling brand -- Splendor.
While Splendor roared, Street and Sleek enjoyed muted success.

As for future prospects, the company will continue to benefit from the growing demand
for motorcycles. With capacity expansion completed, the company will be able to exploit
demand growth. However, the entry of players such as TVS Suzuki, LML and Kinetic into the
four-stroke segment could bring pressure on profitability.

A cause for concern is Honda Motor Company (Hero Honda's collaborator) setting up a
100 per cent subsidiary. Honda is to initially manufacture scooters and could eventually move to
motorcycles. Though Hero Honda has indicated that it would be retained as the preferred
producer of the Honda range of motorcycles, it is premature to come to any conclusion about the
long-term impact of this move.
 These concerns apart, Hero Honda are now the top player in the motorcycle market.
Besides the range of popular brands, its presence across the entire motorcycle spectrum market
should help the company retain its top position.

For Hero Honda, maintaining volume growth will not be difficult. However, growing
competitive pressure could check profitability. Existing shareholders may remain invested and
contemplate fresh exposures on price weakness.

The Honda craze in the Hero Honda’s portfolio Splendor and Passion will not be carried
over by Hero Group from this June. Rather Hero Group will set on its own brand markings and
this will be applicable for other models like Glamour and Hunk too. Hence Honda will not find
place in the brand image of Hero group. As of now, Splendor is popular globally and is fetching
a sale volume of 1 million during the last fiscal and Passion too has similar volume. During this
period the net sale volume had been 4.6 million units from which these two models constituted
45%. The exempted vehicles under this process are CBZ and CD whose contribution had been
30% and of these two CD is making fire with expectations about its sale stint soaring to 5 million
units.

Buzz up!
According to the company reports, the transition process is going on smooth track while
branding concepts are on parallel track. He said everything related to the affairs will be let
known at due time. The JV had been in the process of break as agreed in December 2010 which
made an end to the 26 year alliance and the final settlement is expected to be inked in this March.
Even after the break, Hero group is entitled to enjoy the licensed agreement on technology
privileges till 2014. In all these 26 years Hero group was not rightful to enter into the global
market but the break of this JV enables it to step into the international markets with its products.
NEW DELHI: The split between Hero and Honda is expected to kick-start a price war in
the motorcycle market with companies expected to offer discounts and freebies, which the local
customer had been missing for the past three years.

Honda Motorcycle & Scooter India, the country’s fourth-largest two-wheeler maker, can now
take on the market leader in every segment, while other companies will also try to make the most
out of an expected weakening of Hero Honda’s brand image, say analysts tracking the market.

“The competition to capture the market and maintain their share would now intensify, leading to
price wars ,” PricewaterhouseCoopers auto analyst Abdul Majeed says.

After selling off its 26% stake in Hero Honda to the Hero group, Japan’s Honda is expected to
focus on growing its share in the Indian two-wheeler market, the second largest after China.

Analysts expect the company to invest a part of the stake-sale bounty—at market rates Honda’s
26% would fetch about Rs 8,700 crore—into growing its business in the country.

Hero Motors, which can use the Honda name until 2014, may have a tough time protecting its
market share of 60% in the motorcycles and 43% in two-wheelers. One big challenge will be to
keep its dealer network of 4,500 touch points under control.

“The split in Hero Honda partnership may affect the confidence of their dealers, who had
enjoyed the market dominance for a long time,” says Suzuki Motorcycle India vice-president
(marketing & sales) Atul Gupta.
Analysts also say rivals Bajaj Auto , TVS Motors, Yamaha Motors, Suzuki Motorcyle India and
new entrant Mahindra 2Wheelers will all now try to use it as an opportunity to reduce the gap
with the market leader.

“We will see several more bikes in the Rs 40,000-50,000 bracket, loaded with new features,
something that was recently seen when Ford Figo and Volkswagen Polo added premium features
at the compact car price levels,” says PwC’s Majeed.

While nobody is willing to stick his neck out and predict who will make the most out of the split,
one rider everybody expects to speed up is Honda.

Honda Motorcycle & Scooter India is consistently increasing its market share through a series of
launches. Now, there will be more.
“We would bring in several new platforms including the volumes-based 100cc bikes and the fast
growing 150 cc premium segment,” a senior Honda Motorcycle executive says.

Indian companies are having a hard time with their dealers being poached by Japanese
competitors.
But the domestic players have an upper hand in pricing as they have developed indigenous
technology with frugal engineering.

“Japanese companies would have to spend heavily to compete on prices,” says a Mumbai-based
auto analyst. “In the entire process, the Indian customer would benefit,” he adds.

How often do we come across the news of companies ending a successful joint venture, very
rare! Hero will now have to sweat a lot to maintain the market share of 44%. As a result,
newspapers are anticipating two wheelers prices to fall in times to come. None, other than time
can enlighten us.

With both companies deciding to end their 26-year old partnership, the question being asked is
what may have caused the split? There are two likely reasons. One, the increasing cost of royalty
and technology (R&T) and second, the growing presence and market share of Honda Motorcycle
& Scooter India (HMSI), a 100% subsidiary of Honda.

While people are wondering about how Hero will sustain their profits, market share and brand
image; I would like to congratulate the Indian giant for the divorce with Japanese company
which will only bring exhilaration into the market.

The questions are open to Hero but the management is smart, experienced and veteran. They not
only got their 26% share from Honda at 40% discount to the market rate, but also have gained
expertise over the Japanese technology during their operations of 26 years.

There was out rightly no need to piggyback the brand name Honda anymore which came with a
huge royalty fee. The technology shared by Honda has now been learned and mastered by Hero
during their long 26 years of marriage. The profits were now merely shared for customers’ sake
for they love to see the two names HERO and HONDA together on their bikes. Although, the
guild of the two names was giving maximum sales however was of limited value to the
company.

Do we buy Karizma, CBZ, Splendor, Hunk because they are Honda technology? Or because of
the way they are positioned in the market?

Benefits

New Markets: The Hero Group will gain from dissolving the partnership with Honda Motor by
being able to export more motorcycles and scooters around the world. Hero Honda, which has a
44 percent domestic market share, is currently limited to exporting motorcycles only to India’s
neighbouring countries due to Honda’s global presence. "We will be able to make our own
global presence felt in global markets," Hero Honda managing director Pawan Munjal told a
news conference.

New segments: Motor cycles have been surging in line with the rising incomes of India’s middle
class, who number up to 350 million, which has been aiming at high-end customers, now will
target the large entry-level segment.

The Hero Group has been responsible for marketing and distributing Hero Honda’s motorbikes
while Honda mainly provided technology. Hero will now leverage the plus.

Hero Honda said that the royalty costs for Honda technology would either remain steady or fall
as a result of the deal, in contrast to media reports and the technology would be shared till 2014
to fill the gaps, if any.

Challenges

After the exit of Suzuki from a joint venture, TVS Motors took many years to find its
bearings. Will this be the case with Hero too?

"One big differentiation between Hero Honda and other automobile companies is the scale and
strong brand recall," said Deepak Jain, assistant vice president and research analyst, Sharekhan.
"Hero Honda’s Splendor is a decade-old motorcycle brand. However, automobile divorces are
very challenging. Retaining core customer group will be the incremental challenge for the Hero
group apart from cut-throat competition."

R&T payments are the third biggest expenses for Hero Honda after raw materials and employee
cost. It’s another challenge to optimize the savings to rebranding activity.

The Hero group has two options, either to go for in-house R&D or choose a domestic/foreign
partner for technical collaboration. However, analysts do not see the group going in for a
partnership with anyone.
It will be a challenge for Honda to compete with robust Hero’s marketing and distribution team
and a challenge to Hero will be to live up to the expectations of customers at technical level.

ero Honda Continues Assistance To Tsunami Victims

- January 11th, 2005  

   

Dr. Brijmohan Lall, Chairman, Hero Group awarded the  

prestigious Padma Bhushan - March 28, 2005

'The New Frontier'- New 'Quantum Core' Engine From Honda

- March 3, 2005

Hero Honda Touches New Heights - April 12, 2005

Hero Honda Reaches A Milestone With 2 Million 'Relationship

Programme' Members - April 26, 2005

Hero Honda Adds 'Glamour' to the Deluxe Segment - June 23,

2005

Hero Honda Launches Special Initiative - August 3, 2005

Hero Honda SBI Credit Card For Passport Programme Members

Launched In Rajkot - October 5, 2005

Hero Honda Rides Into A New Segment - October 5, 2005

  Detail News 2005

HERO HONDA CONTINUES ASSISTANCE TO

TSUNAMI VICTIMS Contributes Rs. 2 Crore to PM's
Relief Fund
 

New Delhi, January 11th, 2005: Hero Honda Motors Ltd.,

along with all its associates, is continuing its efforts towards
providing relief and assistance to the Tsunami victims, as its
foremost priority. As a part of this endeavor, the Hero Honda
Management and ancillaries have contributed an aid of Rs. 2
Crore to the Prime Minister's Relief Fund.

Earlier, soon after the tragedy struck, Hero Honda had set up
three relief camps to carry out immediate relief operations in
the affected areas. These camps, operational in Nagapattinum,
Chennai and Cuddalore, provided direct assistance to the
survivors. These camps were run by Hero Honda employees
and were supported by the local Hero Honda dealers and
vendors. In addition to these camps, Hero Honda has also
extended aid through the Chief Minister's Relief Fund.

Mr. Brijmohan Lall, Chairman, Hero Honda Motors Limited,

expressed his grief over the vast destruction caused by the
tragedy. He said, "I feel, in this situation, it is the duty and
responsibility of each and every human being to contribute, in
whichever way, to help the survivors of this tragedy. We are
closely monitoring the situation and will continue our
assistance, to the best of our ability, to help the victims."
 

DR. BRIJMOHAN LALL, CHAIRMAN, HERO GROUP

AWARDED THE PRESTIGIOUS PADMA BHUSHAN
 

New Delhi, March 28, 2005: Dr. Brijmohan Lall, Chairman,

Hero Group, was today awarded the Padma Bhushan by
Hon'able President of India, Dr. A.P.J. Abdul Kalam at a
ceremony held at Rashtrapati Bhavan to honour the Padma
awardees 2005. The awardees, which were announced on
Republic Day this year, included people from various walks of
life such as Business, Media, Entertainment, Public Affairs,
Social Work, Art, Literature and Education, Science and
Engineering, Journalism and Sports, among others. Dr.
Brijmohan Lall was conferred the Padma Bhushan, one of the
highest civilian honours in India , for his invaluable
contribution to trade and industry.
The Prime Minister, various cabinet ministers, business
leaders, foreign delegates, film personalities and bureaucrats
attended the impressive ceremony.

Dr. Brijmohan Lall is one of the most respected business

leaders not only in India but also globally. He has led Hero
Honda from the front to establish it as the 'World No.1' two-
wheeler company. Hero Honda today is one of the best
examples of successful JV 's worldwide. Dr. Brijmohan Lall is
also the man behind the world's largest cycle manufacturing
company, Hero Cycles and is the head of the US$ 2.2 billion
Hero Group.

Dr. Brijmohan Lall is a first generation entrepreneur who started

small and through sheer hard work and perseverance has today
made his mark on the global business environment.

'THE NEW FRONTIER'- NEW 'QUANTUM CORE'

ENGINE
FROM HONDA

Hero Honda Launches Super Splendor - The' Sarva Guna

Sampanna' Bike
 

 3-year warranty on the new bike, yet another first in the

industry.
 New motorcycle to consolidate company's undisputed
leadership in the expanding Deluxe segment.  

March 3, 2005, Mumbai: Hero Honda, the 'World No.1' two

wheeler company, has once again redefined standards in two-
wheeler engine technology by introducing, for the first time, a
125 cc 'next-generation' engine in the country. The futuristic
Quantum Core engine, developed specially for the Indian
customer, powers Hero Honda's new offering, the 'Sarva Gun
Sampanna' Super Splendor . The 125cc Quantum Core
engine , perfected after a series of refinements, offers the
customers an unprecedented combination of top-class fuel-
efficiency and high power. The new exemplary engine enables
the customer to 'Ride the New Frontier'.

With this launch, the company, credited with pioneering the

revolutionary 100 cc 4-stroke motorcycle in India , has
reiterated its undisputed leadership of the Indian two-wheeler
industry.

Announcing the launch of the new motorcycle, Mr.

Brijmohan Lall, Chairman, Hero Honda Motors Ltd., said,
"As the leading two-wheeler brand in the country, we consider
it our responsibility to set and improve standards, for the
benefit of the customers, and growth of the industry. We are
sure that this breakthrough engine technology, will also
reinforce the commitment and support from our joint venture
partner- Honda Motors, Japan

Mr. Pawan Munjal, Managing Director, Hero Honda

Motors Ltd., was also enthusiastic at the launch. Elaborating
on the fast changing Indian two-wheeler industry, he said,
"Hero Honda is already an undisputed leader in the 'deluxe'
segment, which is witnessing the highest expansion currently
and will continue to do so in the coming years. The launch of
Super Splendor will not only strengthen our domination in the
segment but will also redefine the structure of the Indian two
wheeler industry."

Commenting on the new launch, Mr. Atul Sobti, Executive

Director - Business Operations, said, "The new motorcycle
has been developed after extensive market research. With its
USP of technological excellence, which delivers a unique
combination of top fuel-efficiency and high power, this 'Sarva
Gun Sampanna' bike will surely prove to be an owner's
delight. In line with the top performance, we are also offering
a three-year warranty on the bike, for the first time in the
Indian two-wheeler industry."

Super Splendor will be available in four variants - drum-kick,

drum-self, disc-kick, disc-self and ten vibrant colours - Candy
Blazing Red, Black (2 types of stripes), Tahitian Blue, High
Granite Blue, Cool Mint Green Metallic, Gold, Silver,
Maroon, and Forest Blue Metallic.

The motorcycle will be manufactured at the company's state-

of-the-art Gurgaon plant and will be available through Hero
Honda's wide sales network of almost 2000 sales and service
points, spread across the length and breadth of the country.

he motorcycle is attractively priced at Rs.42, 231 (Drum +

Kick version Pune ex-showroom) - net of the Rs 1001/-
celebration offer.
 

HERO HONDA TOUCHES NEW HEIGHTS

 

 Registers Annual Growth Of 27% In Volumes, 26% In Total

Turnover
 Eps Of Rs. 40 Per Share
 Announces Dividend Of 1000%  

New Delhi, April 12 th , 2005: Consolidating its leadership in

the two-wheeler market, Hero Honda Motors Ltd., the
World's No. 1 Two-Wheeler Company, sold an
unprecedented 26,21,400 motorcycles in the year 2004-05 at a
growth of 27%, way above the industry growth of 20%. Hero
Honda increased its lead over the nearest competition by over
10 lakh bikes during this year, up from eight lakh last fiscal.

Hero Honda also strengthened its market share at 50%, up

from 48% last fiscal, ensuring that every second motorcycle
sold in the country during the financial year 2004-05 was a
Hero Honda bike. Hero Honda garnered 40% market share in
the overall two-wheeler industry.

MAJOR PERFORMANCE HIGHLIGHTS FOR THE

YEAR 2004-05

FY 2004 - 05 FY 2003 - 04 Growth

Parameter
Total Turnover Rs.7563 Rs. 5997 crore 26%
crore
Profit Before Tax Rs.1217 Rs. 1072 crore 14%
crore
Profit After Tax Rs. 810 Rs. 728 crore 11%
crore
Total motorcycle 26, 21,400 20,70,147 27%
sales units units
Market Share in 50% 48% 2%
motorcycles
The company has once again proved to be one of the most
investor friendly companies, creating wealth for its legions of
shareholders. It announced a dividend of 1000%, i.e. Rs 20/-
on each share of face value Rs 2/-.which would entail an outgo
of Rs 399.38 crore excluding withholding tax.

Announcing the annual financial results at a press conference

here today, Mr. Brijmohan Lall, Chairman, Hero Honda
Motors Ltd , said, "The new launches, technological
innovation and the productivity agenda have contributed
towards our unprecedented growth. This has also been made
possible due to the dedication of the entire Hero Honda family
including our vendors and suppliers. This success would be
incomplete without thanking our partner Honda Motor Co.,
Ltd., Japan for their unrelenting support."

According to Mr. Pawan Munjal, Managing Director, Hero

Honda Motors Ltd. , "Every second motorcycle sold during
2004-05 was a Hero Honda. We have demonstrated the
resilience and enterprise of a true world leader in the face of
severe challenges in the marketplace and rising input costs.
For us at Hero Honda, Year 2005-06 is again full of
innovation and exciting launches, and we will continue to set
benchmarks in product quality, market execution and
customer satisfaction . We have already increased the
capacity in both our plants to more than three million
units to meet the rising demand of our customers ."

The Operating Margin for the financial year 2004-05 was at

14.50%, as compared to 15.56% last fiscal, a testimony to the
company's relentless pursuit of cost rationalization and
judicious management of working capital in spite of increase
in input cost. Earnings Per Share (EPS) at the end of the
year stood at Rs. 40/-. EBIDTA margin was 15.69%.

The company also registered a robust performance for the

fourth quarter of the FY 2004-05. The motorcycle sales for the
period January - March 2005 grew by a remarkable 16 per
cent as compared to the corresponding period in the previous
FY. The company sold 685,419 motorcycles in the quarter, up
from 5,92,718 units sold during January - March 2004.

The Total Turnover of the company for the same period also
went up by 15% from Rs. 1724 crore in the fiscal 2003-04 to
Rs. 1976 crore.  Profit before tax (PBT) during the quarter was
Rs. 303 crore as compared to corresponding quarter Rs. 311
crore. Profit after tax (PAT) during the quarter was Rs 207
crore during January - March 2005, from Rs. 211 crore during
the same period last fiscal.
 

HERO HONDA REACHES A MILESTONE WITH 2

MILLION

'RELATIONSHIP PROGRAMME' MEMBERS

Hero Honda Passport Programme - India 's largest

Customer Relationship Management (CRM) Program
 

New Delhi , April 26, 2005: Hero Honda, the 'World No. 1'
two-wheeler company, today announced that it has recently
achieved a landmark member base of more than 2 million
customers for its "Passport Programme". Extending across
1000 authorized Hero Honda dealerships and SSPs, the
program has now become India 's largest Customer
Relationship Management (CRM) Program. The
unprecedented success of the CRM program is a testimony of
the faith that the customers repose in the company and its
products. It was born out of a need to maximize commitment
and strengthen the emotional value that binds our diverse set
of customers to the "Hero Honda" brand.

With its apt tagline "Rishta Dil Ka", the Passport Programme
is a strong platform for the company to build long-term
relationships with its customers, beyond the point of sale, and
communicate its brand image of 'trust' and 'reliability'.

The Hero Honda Passport Programme membership is a unique

initiative open to the owners of Hero Honda motorcycles. The
program offers many tangible and intangible benefits to both
the customers as well as to the dealers. Members earn points
for incurring expenditure at the Hero Honda
dealership/workshop, which can later be redeemed against
benefits.

On the occasion of the commemoration of the 2 million-

passport program milestone, Mr. Pawan Munjal, Managing
Director, Hero Honda Motors Ltd. said, "At Hero Honda our
endeavor is to offer the best in product quality to our
customers resulting in highest levels of customer satisfaction.
The Passport programme not only builds enduring
relationships with our customers but also offer them some
'extra value', beyond just the tangible benefits of our products.
This milestone only reaffirms our customers' faith in us, which
has been pivotal in the company's growth".

Sharing similar sentiments, Mr. Atul Sobti, Executive Director

- Business Operations, Hero Honda Motors Ltd. said, "The
Passport Program represents a fundamental change in looking
at the customer as a long-term asset rather than a mere target
for sales transaction. This landmark figure of 2 million
members reaffirms Hero Honda's commitment to be a
customer-focused company, continuously striving to provide
enhanced value for money to its customers. On this occasion, I
want to thank all our customers and dealers who have made
enormous contribution in making this program a success."

An extraordinary feature of the programme is the

Accumulation model wherein even after redemption, a
member's points do not decrease but continues to accumulate
to reach the next gift milestone. The basic philosophy behind
the programme is to simply reward members for what they do
as a routine and not to push them for doing extra to get the
rewards.

The Hero Honda Passport programme was rolled out

nationally in the year 2001, after a successful pilot in four
states in the year 2000. A unique feature of the programme is
its reward model, according to which every rupee spent by the
member translates into a reward point. These reward points
can then be redeemed for exciting gifts.

One of the most significant benefits of this program is a free

personal accident policy worth Rs. 1 lakh. Insurance claim of
over Rs. 6 crore has already been disbursed to dependent
families, exemplifying Hero Honda's concern not just for the
safety of its customers, but also their family members.

With the help of this program, the company has already

received over 900,000 referrals thus also giving a fillip to sales
through favourable word-of-mouth.

Result McCann has been Hero Honda's partner in this

initiative right from the beginning. With a dedicated team of
more than 100 people, Result McCann looks after the entire
back-end operations, from creating and maintaining customer
records, to tracking points accumulation, to providing insights
about the performance of the programme. The team has also
developed special softwares for use at different stages of the
programme. Passport processing and dispatch is undertaken at
the passport-processing centre on a day-to-day basis. Data
processing, bulk mailing and dispatch of gifts and promotional
material to dealers are all managed efficiently by the agency,
contributing significantly to the success of the programme.

The Passport Programme membership entitles the customer to

several other benefits and privileges such as:

•  Participation in the Winner of the Month draw which offers

the four winners a Hero Honda Splendor free or Rs. 40,000
cash as per choice

•  Special rewards and discounts an accumulation of specifies

points, against purchase of spares accessories and service at
the Hero Honda Authorized Dealerships/ Service Centers .
The member can earn bonus points even when he visits the
dealership for a free service.

•  Invitations to exclusive events such as movie shows,

musical nights, etc.

•  Participation in contests through the quarterly newsletter, '

Suhana Safar' , which also keep the members updated on
latest developments in the company, new product launches,
exclusive offers from other companies etc.

Any Hero Honda customer, including those who bought a

Hero Honda bike much before the programme was
launched, can also become a member of the Passport
programme and avail its special benefits.
 

 
HERO HONDA ADDS 'GLAMOUR' TO THE DELUXE
SEGMENT
INTRODUCES ITS SECOND MODEL WITH HONDA'S
NEXT-GENERATION 'QUANTUM CORE' ENGINE
 

 First phase of the launch to cover the four states in South

India
 3-year warranty on the new bike - a unique offer by Hero
Honda
 New motorcycle, a mix of next-gen engine and design, to
further consolidate company's undisputed leadership in
the Deluxe segment  

23 rd June 2005, Chennai: Hero Honda, the 'World No.1'

two wheeler company for the fourth consecutive year, today
announced the launch of its new Deluxe segment offering,
christened Glamour, in South India. The new model, which
comes with Honda's 125 cc 'next-generation' Quantum
Core engine, is part of the company's strategy to consolidate
its undisputed leadership in the fast growing deluxe segment
of the Indian two-wheeler industry.

The futuristic Quantum Core engine, first introduced by Hero

Honda in its 125 cc offering - Super Splendor - launched
earlier this year, has been developed specially for the Indian
customers. Perfected after a series of refinements, the
exemplary engine offers the customers an unprecedented
combination of top-class fuel-efficiency and high power.

The aesthetics of the motorcycle have also been designed

keeping in mind the likes and desires of customers in this
segment. The Glamour sports a gen-next visor, which lends it
a suitable persona and an aerodynamic look, further
strengthened by the contemporary shape of multi-reflector
winkers. The motorcycle comes equipped with a big and
elegantly contoured fuel-tank, which enables the rider to have
a comfortable leg position. The seat of the Glamour is also
designed to offer enhanced comfort to the rider. The flush-
type lock on the fuel tank is the first-of-its-kind in the
segment. Glamour comes with a new tripod instrument panel.
The stripes and checkered flag lend the bike a distinct shape
and a sporty look. The tail-light and rear visor gel perfectly
well with the overall body design of the motorcycle. The
stylish muffler adds to the beauty of this latest to-be trend-
setter in the motorcycle industry.
Announcing the launch of its second Deluxe segment offering
in the current calendar year, Mr. Brijmohan Lall, Chairman,
Hero Honda Motors Ltd., said, "Hero Honda has always
believed in setting standards for the industry by offering
products which not just meet but go beyond customers' needs
and desires. Earlier this year we introduced the Super
Splendor, with the Quantum Core Engine, which has been
much appreciated by our customers. I am sure our new
offering Glamour will help us further consolidate our position
in the Deluxe segment which is witnessing the highest
expansion currently and will continue to do so in the coming
years."

Commenting on the new launch, Mr. Atul Sobti, Executive

Director - Business Operations, said, "Glamour has been
developed on the basis of extensive market research. Every
aspect of the motorcycle - from technology to its looks to
comfort - has been addressed keeping in mind customers'
requirements. Its distinctive features make it stand apart from
the growing clutter of models in the segment. Legendry
reliability and trust that Hero Honda has always stood for is
more than evident in initiatives such as the 3 years/ 40,000
kms warranty that Glamour comes with."

Glamour will be available in four variants - drum-kick, drum-

self, disc-kick, disc-self and ___ vibrant colours - Candy
Blazing Red, Black with Blue Stripes, Excellent Blue
Metallic, Vibrant Green Metallic, Cloud Silver Metallic, Black
with Yellow Stripes, Palace Maroon Metallic, Impulse Orange
Metallic and Frost Blue Metallic.

The motorcycle will be manufactured at the company's state-

of-the-art Gurgaon plant and will be available through Hero
Honda's wide sales network of almost 2000 sales and service
points, spread across the length and breadth of the country.

he motorcycle is attractively priced at Rs._______ (Drum +

Kick version Chennai ex-showroom).
 

HERO HONDA LAUNCHES SPECIAL INITIATIVE

TO HELP ITS AFFECTED CUSTOMERS
 IN GREATER MUMBAI AND KONKAN REGION
 

Mumbai, August 3, 2005: Hero Honda, the 'World No. 1' two
wheeler manufacturer, has announced a special initiative for
its customers in Greater Mumbai and the Konkan belt, whose
motorcycles may have been affected by intensive rains in the
region. As a gesture of concern, the company is initiating
"Moving Ahead" service camps, proactively offering
customers 50% discount on all spares and service.

As a part of the initiative, the company is offering to repair

motorcycles of its customers at a 50 per cent discount on all
spare parts, engine oil as well as labor cost. The repairs will be
carried out by specially trained Hero Honda technicians.
Additionally, the company is also offering the facility of
picking up stranded motorcycles of its customers, free of cost.

Announcing the initiative, Mr. Ajay Dikshit, General Manager and

Head of Customer Care, Hero Honda Motors Ltd., said, "The
situation in Mumbai and adjoining cities caused due to the
torrential rains is a cause of concern for all. We have launched this
initiative to help our customers recover from loss due to the
damage caused to their motorcycles because of excessive water
clogging. I would request all our affected customers in the region to
get in touch with their nearest Hero Honda dealer for immediate
assistance."

HERO HONDA SBI CREDIT CARD FOR PASSPORT

PROGRAMME MEMBERS LAUNCHED IN RAJKOT

Hero Honda SBI Credit Card - The First Co-Branded

Credit Card
In The Two-Wheeler Industry
 

Rajkot , October 3, 2005: Hero Honda, the World No. 1 two-

wheeler manufacturer, and SBI Card today launched the first
Two Wheeler Co brand Card - "Hero Honda SBI Card" in
Rajkot .
The first Hero Honda SBI Card was handed over to Mr.... by
Mr. Gurvinder Singh Rana, Area Sales Manager ( Gujarat ),
Hero Honda Motors Ltd.

The Hero Honda SBI Card already has 21 lakh member base,
spread over 50 cities across the country. It can be used at more
than 2 lakh outlets in India and more than 30 million outlets
around the world displaying the Visa logo. Bringing together
two of India 's power brands , the Hero Honda SBI Card
would be given Free for first year to all Passport Programme
members of Hero Honda.

The Hero Honda Passport Programme members in Rajkot will

be able to apply for the credit card at any of the Hero Honda
dealerships in the city.

On the occasion of the launch of the credit card in Rajkot , Mr.

Gurvinder Singh Rana said, "With a member base of more
than 21 lakh customers extending across 1000 authorized
dealers and SSPs, Hero Honda Passport Program is today the
country's largest Customer Retention Management (CRM)
program. The program, under the apt tagline "Rishta Dil Ka",
has become a strong platform for Hero Honda to build long-
term relationships with customers beyond the point of sale,
and take forward the brand image of 'trust' and 'reliability'.
This innovative step reiterates our commitment to provide
enhanced value to our customers."

Some of the exciting features offered by the Hero Honda - SBI

Card include:

•  Tiered rates of interest on Retail outstanding, with interest

rates varying with outstanding amount.

•  'Flexi pay' - an easy installment plan at one of the industry's

lowest rate of interest @ 10%.

•  'Balance transfer' facility @ 0% interest for 75 days.

•  Free Purchase Protection against fire and theft up to Rs.

15,000 for 90 days

•  Transaction fee waivers on IOC and IBP petrol pumps for

fuel purchase of more than Rs. 250
•  Accident insurance cover of Rs one lakh with additional Rs
one lakh insurance in case of loss of life on Hero Honda.

•  24 hour SBI Card Customer Helpline in India and Visa

Emergency Services in 75 countries.

About Hero Honda Passport Programme:

It was born out of a need to maximize commitment and

strengthen the emotional value that binds our diverse set of
customers to the "Hero Honda" brand. The 'Passport' program
represents a fundamental change in looking at the customer as
a long-term asset rather than a mere target for sales
transaction.

After the test-launch in four states in 2000, we rolled out the

program nationally in April 2001, and extended it to Sales and
Service points in October 2001, taking it to the members'
neighborhood all over the country. It's been a rewarding
journey for members as they earn rewards for all regular
transactions for which they were not getting anything extra in
the past. They are also treated in a special way, with a host of
other benefits as members.

One of the most significant benefits this program gives to its

members is the free personal accident policy. Insurance claim
of over Rs. eight crore has already been disbursed to
dependent families, a fine example of the fact that we care not
just for the safety and wellbeing of our customers, but also
their family members.

As part of this program, we have built up over 12,00,000

referrals, with tremendous potential to give fillip to sales
through favourable word of mouth. We send out a quarterly
newsletter called "Suhana Safar" to all 21 lakh members. This
constant one-to-one touch with customers keep Hero Honda
top-of-mind amongst our customers. Over four lakh members,
along with their families, were invited to over 170
entertainment events over the last few years. Birthday greeting
are also sent to all members, thus retaining customers for life
through such a simple gesture.

Any Hero Honda customer, including those who bought a

Hero Honda bike much before the programme was launched,
can become a member of the Passport programme and avail its
special benefits.  

About SBI Cards  

SBI Card is a joint venture between State Bank of India and

GE Money to offer Indian consumers extensive access to a
wide range of world-class, value-added payment products and
services. The partnership leverages the competitive advantages
of SBI's brand equity, 100% blind brand recall, customer
relationship and incomparable market presence with GE
Money's global expertise and experience in technology and
processes.

SBI Cards is today ranked third in the industry with a base of

about 1.9 million at present.
 

HERO HONDA RIDES INTO A NEW SEGMENT

Launches "PLEASURE" - First Hero Honda Scooter
Also Introduces 150 CC 'ACHIEVER' to Strengthen its
Range Of Premium Motorcycles
 

New Delhi, October 5, 2005: Hero Honda , the 'World No.1'

two-wheeler manufacturer, today announced yet another
significant milestone in its long and illustrious journey - its
first scooter - " Pleasure" . In keeping with its agenda of
innovation, Hero Honda also unveiled 'Achiever' , its new
offering in the 150 cc segment, further adding muscle to its
already strong product portfolio.

Hero Honda, which revolutionized the Indian two-wheeler

industry with the first 4-stroke 100 cc motorcycle (CD-100)
more than two decades ago, is set to unleash 'Pleasure' in the
market by mid-November.

Delighted at the beginning of a new phase in Hero Honda's

journey, Mr. Brijmohan Lall, Chairman, Hero Honda
Motors Ltd. , said, "The launch of our first scooter is going to
be a momentous occasion for everybody at Hero Honda. With
this, we are now ready to extend our services to a wider
customer profile. Our first scooter is yet another testimony to
the technology support being extended by our joint venture
partner to us. We thank them for their support and contribution
in making this day a historic day for Hero Honda."

Announcing the dual launches, Mr. Pawan Munjal,

Managing Director, Hero Honda Motors Ltd ., said, "The
Achiever is our third new motorcycle to be launched during
this calendar year. With the exceptional combination of power
and fuel-efficiency, which are also the best in the segment, we
are confident that Achiever will soon establish itself as the
preferred choice of customers and would help in consolidating
our position in the premium segment."

Talking about the first Hero Honda scooter, he said, "The

scooter segment in India is over one million units and the
segment has been witnessing an impressive growth for the past
few months. We are confident that with the launch of Hero
Honda Pleasure in mid-November, we would be able to carve
out a place for ourselves in the industry and also contribute
towards its further growth."

One of the most fuel-efficient in the scooter segment, the

100cc Pleasure has distinctive features, including an ABS
body, variomatic transmission and high pulling power. It also
comes equipped with the tuff-up tube - a technology which
offers an immediate remedy in case of a tyre puncture by
secreting an a nti-puncture sealant gel. With such diverse
features, Pleasure will help Hero Honda cater to a much wider
customer base, thereby strengthening its undisputed leadership
position in the two-wheeler industry. Self-start will be offered
as a standard feature in the scooter.

Pleasure will offer customers a contemporary style and

attractive aesthetics through the following features:

 multi-reflector headlight;
 body-coloured mirrors;
 multi-reflector winkers beautifully nestled in the front;
 new age oval-shaped instrument panel;
 aluminium cast rear grip,
 stylish muffler
 modern tail-light cluster;
 broader seat for comfortable riding;
 light-weight body;
 more-than-sufficient luggage space
 hook and glove box for extra utility
In addition to Pleasure, Hero Honda today also introduced its
new offering in the 150 cc motorcycle segment - the Hero
Honda Achiever. The Achiever promises to deliver a
combination of high power of 10kw (13.4 bhp) in its segment,
with a high fuel efficiency. Other striking features include:

 attractive visor;
 eye-catching graphics on the petrol tank;
 multi-reflector headlight with halogen lamp and a position
lamp;
 multi-reflector tail lights and winkers;
 uniquely designed muffler with heat shield and d ual tone
painted chain case
 tuff-up tube to add to the rider's convenience and
confidence.

Both Hero Honda Pleasure and Achiever will be available

nationally through the company's existing wide network of
dealers. In addition, Pleasure would also be sold through
outlets targeted exclusively for women customers at 24
locations covering 20 towns nationally.

While Pleasure will be offered in a wide range of eight

attractive colours including Orange , Grey Silver, Aqua Green
and Light Purple, the Achiever will be available in seven
colours including Magnetic Blue and Spring Violet. Achiever
is available in four variants - drum/kick, drum/self, disc/kick,
disc/self. There would also be two versions viz. with round
headlight and visor with traphezoidal headlight.

The motorcycle is attractively priced starting Rs. 47,900 /-

(ex-showroom Delhi ), which is the festive celebration price
offer. The price for Pleasure would be announced shortly.
 

For Further Information please contact:

Sanjiv Singh | Rajni Kumar

Corporate Voice | Weber Shandwick
M: +91-9818430943 | +91-9312501958
E: [email protected];
[email protected]
www.webershandwick.com
 

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