Thursday, August 30, 2012
By Manoj Kumawat
Honda to soon split itself from Shriram Group, split not to affect Brio, City Diesel launch
If a layman is asked about what Honda do in India should, the obvious answer would be that it should launch Honda City Diesel and Honda Brio Diesel. But Honda seems to be busy with other things and it is related to its partnership with Siddharth Shriram Group. It is believed that the car maker is all set to make its own way now on after being with the said Group for over 17 years. If the split takes place, Honda Siel Cars India will become Honda India and Honda will be the sole owner of it. This is in line with what Renault and Mahindra did a year ago after launching the Mahindra Verito known as erstwhile Mahindra Logan.
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It seems that the parting trend has set in well in the auto industry and the most recent split was between Tata and Fiat when the latter had decided to showcase its two car Fiat Linea sedan and Fiat Punto hatchback at exclusive showroom and not at Tata showrooms. Similarly, reports confirm that the Honda maker has almost gone through the formalities and it is also learnt that Shriram has sold its stake to Honda and has taken Rs 180 crore in return. This change is believed not to affect the launch of the new Honda cars in any way and it is also believed that Honda City CNG launch and Honda City Diesel as well as Honda Brio Diesel launch plans are also intact for this year end.
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Reason behind this split seems to be the dwindling profits of the Joint Venture Honda Siel Cars India but experts believe that the JV had nothing wrong in it. It was due to the natural calamities in 2011 that production was hit and so was the Honda profit. Next, it was the diesel car wave triggered by the increase in petrol prices and being all petrol car makers, Honda suffered the most after Maruti that has most of its offerings in petrol.