New Delhi: Two decades after it first set shop in India, Japanese major Honda is now thinking of consolidation.
Which is perhaps why just a day after it announced setting up of a new spare parts company, Honda on Tuesday hinted at entrusting this new entity with more than just spare parts. Honda Motor India could well become the holding company for all different Honda investments in India.
At present, Honda Motor Company (HMC) of Japan holds 26% stake in the listed two-wheeler entity Hero Honda; 100% equity of Honda Motorcycle & Scooter India (HMSI); 99.9% in Honda Siel Cars India (HSCI) and 66.67% in Honda Siel Power Products (HSPP).
Masahiro Takedagawa, president & CEO of HSCI, said, “There is a possibility that all these shares Honda holds in India may be transferred to Honda Motor India. This involves considerable technical complications and we are taking legal opinion on the matter.”
Honda Motor India is being set up as a 100% arm of the Japanese parent.
While announcing the new company, the president and CEO of HMC T Fukui had said that it will deal in parts for the automobile (car business) to begin with.
The new company will be established this year and will be headed by Takedagawa. Fukui said there was no decision yet on whether the new company will also supply parts to the two-wheeler ventures or the power products business and if it will set up a manufacturing plant in the country.
When asked whether there were any plans to merge the two separate two-wheeler ventures (HMSI and Hero Honda Motors) in India, Takedagawa replied in the negative.
HMC has already announced that it will divest a 5% stake in HSCI in favour of Siel for a consideration of Rs 73 crore. Takedagawa said there were no plans to offload equity in Hero Honda.
