Eicher Motors ends JV with US partner Polaris Industries
Bengaluru: Eicher Motors Ltd on Monday announced its decision to shut its joint venture (JV) Eicher Polaris Pvt. Ltd (EPPL) with US-based Polaris Industries Inc. as sales of its personal utility vehicle Multix dropped to unsustainable levels.
The JV was incorporated in 2012 and its only product, Multix, was launched in 2015 from a manufacturing capacity established on the outskirts of Jaipur, Rajasthan.
According to a press release issued by the company, given its unique positioning and differentiated product features, Multix initially generated significant interest from customers. However, the interest could not be sustained and subsequent sales performance was significantly slower than the company’s expectation.
“Despite several initiatives, the company’s performance could not be revived. Hence, the board of EPPL has concluded that in the present circumstances, it is in the best interest of all stakeholders to close the operations of the company,” the statement noted.
During the year ended 31 March 2017, EPPL’s net loss amounted to Rs91.83 crore, 50% of which was consolidated with the net profit of Eicher Motors.
As of 31 December 2017, Eicher Motors had invested Rs289.50 crore in the joint venture and the amount invested so far, together with additional investments, as required to close down the operations, shall be written down, the company mentioned in the press release.
At 11.36am, Eicher Motors shares traded 0.85% higher at Rs28,110.60 on BSE, while the Sensex gained 0.86% to 33,593.77.