Eicher Motors ends JV with US-based Polaris
Eicher Polaris had launched personal utility vehicle Multix in 2015
Eicher Motors, the maker of Royal Enfield motorcycles, has decided to shut down the personal utility vehicle division set up as an equal joint venture with American firm Polaris, with immediate effect. The company had invested ~2.9 billion in the venture. The whole amount will now be written down. The joint venture incurred a loss of ~910 million in 2016-17.
There were around 200 employees of Eicher Polaris, including contract workers, and a transition plan was being worked out for the permanent staff, a spokesperson said.
Eicher joined hands with Polaris in 2012. Eicher Polaris, the joint venture company, had launched Multix in 2015, which the companies positioned as the country’s first personal utility vehicle. It was targeted at independent businessmen in smaller towns and cities, and a separate marketing network of 90 dealerships was set up.
Launched at ~232,850 (ex-showroom price), Multix claimed to offer a large cabin space, comfortable for a family of five with luggage. It was also equipped with XPORT, a power takeoff point, which could generate up to 3 kilowatt (KW) for use at home or to run equipment such as water pumps or drilling machines.
“Given its value proposition, Multix has received significant traction among its target audience,” Siddhartha Lal, managing director and chief executive officer at Eicher Motors, said in the company’s 2015-16 annual report. However, only 3,500 Multix could be sold since its launch while the plant was set up with a capacity to manufacture 60,000 vehicles every year.
Multix initially generated significant interest among customers, the company
said in a statement. “The initial interest could not be sustained and subsequent sales were significantly slower than expectations. Despite several initiatives, the company’s performance could not be revived. It is in the best interest of all stakeholders to close the operations,” Eicher said. The company’s stock price closed at ~28,323, up 1.61 per cent, in sync with the broader market.
Eicher said the company would continue to provide spares and service support for Multix vehicles that were on the road.