As per the reports from AutoCar India, Honda may provide Hero group a license to produce 110 CC engine which powers the Honda CB Twister bike from Honda in India. Since the Hero and Honda have a long term relationship which has been recently ended, this could be a friendly deal involving some royalties or some other sort of arrangements.
If the report stands to be positive, this will result in a new Hero Honda (now Hero Group) Motorcycle launch in 2012 with the same engine as the Honda CB Twister. This will be a very positive deal for the Hero group as they will get a reliable and fuel efficient engine to power their vehicles without spending millions of bucks and years on research and development of an engine from scratch.
There are also rumors about Honda to give Hero group a Scooter engine license as well, however these news will be confirmed with time when some official statement comes up.
Source – AutoCarIndia
