The long-term partnership between Honda Motor Corporation (HMC) and Sriram Industrial Enterprises Ltd (SIEL) has come to an end. Honda will buyout SIEL’s stake in its Indian subsidiary for Rs.180 crore, thus ending 16 years of partnership, which Usha International Ltd (UIL), Honda Siel Cars India Ltd and Honda Motor Company shared to develop the Honda Siel Cars India Ltd’s brand. As per the agreement, Honda Motor Co will buy out all of the 18 million shares, which UIL held in the joint venture. UIL, which had 3.16% stake in HSCI, had shown an interest in quitting from the joint venture in order to better focus and strategically invest and expand its own core business. Honda Siel Cars India will now be a 100% subsidiary of Honda Motors. The process of changing the company’s name and other formalities will take a few more months to come about. The decision came after much prolonged dilly-dallying between the two partners over the stake valuation of UIL. Honda, which commenced sales operations in India with flagship sedan City in 1998, has seen market share dip over the decade due to increased competition from global players and has been having a tough time in India. It will be interesting to see how as a single owner now it gets its act together.
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