Eicher Motors, the listed parent of Royal Enfield motorcycles, will shut down Eicher Polaris, its six-year joint venture with USA’s Polaris Industries Inc as the sales of Multix, a personal utility vehicle made by the venture, dropped to unsustainable levels in India.
The equal joint venture was incorporated in 2012 and its sole product, Multix, was launched in 2015 from its factory on the outskirts of Jaipur in Rajasthan.
The company said Multix failed to make any significant inroad into the rural utility vehicle market, leading to Eicher Polaris incurring a net loss of Rs 91.83 crore in FY 16-17.
As of 31 December 2017, Eicher Motors had invested Rs 289.50 crore in the venture and the amount shall be written down once the venture downs shutters.
“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 company said in a statement on Monday.