Eicher Motors has today announced that it has decided to end its five-year joint venture with the US-based Polaris Industries. The reason behind the end of the partnership is not meeting the sales expectations for the Multix utility vehicle. Eicher Motors has said in a statement that the board of Eicher Polaris Pvt Ltd (EPPL) has just passed a resolution to close operations of the JV firm with an immediate effect. In the coming days, the EEPL will engage with all its stakeholders including customers, suppliers, employees and channel partners to implement the closure. However, this does not mean that if you own a Multix, you will need to worry as the company will continue to provide spares and service support for the fleet of Multix vehicles on the road. EEPL, which is an equal joint venture between Eicher Motors and US-based Polaris Industries came into effect October 2012. After almost three years, Multix personal utility vehicle was launched. Given its unique positioning, the vehicle generated significant interest from customers initially.
The company further said that however, the initial interest could not be sustained and the subsequent sales performance was significantly slower than the company’s (EEPL) expectations. Despite several initiatives, the performance of EEPL could not be revived and this is the reason why the company ended the JV. 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.
By December 31, 2017, Eicher Motors had invested Rs 289.50 crore in EPPL. The sums invested so far, together with additional investments, as required to close down the operations, shall be written down in accordance with the applicable regulations, Eicher Motors said. During the year ended March 31, 2017. The net loss of EEPL has amounted to Rs 91.83 crore, 50 percent of which was consolidated with the profit after tax of Eicher Motors.
