Eicher Motors is shutting down its personal utility vehicle division with immediate effect, which it had set up as an equal joint venture with American firm Polaris. The maker of Royal Enfield motorcycles had invested Rs2.9 billion in the venture, which will now be written down. The joint venture suffered a loss of Rs 0.91 billion in FY17.
In 2015, Eicher Polaris, the joint venture company, had launched Multix, which was positioned as the country's first personal utility vehicle. The vehicle was targeted at independent businessmen in smaller cities and towns.
Multix, which rolled out from the company's Jaipur manufacturing unit had a separate marketing network. The vehicle had initially generated significant interest from customers, but the company said in a statement, ''The initial interest could not be sustained and the subsequent sales performance was 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.''
Over the coming days, Eicher Polaris would engage with all its stakeholders, including customers, suppliers, employees and channel partners to implement the closure. According to Eicher it would continue to provide spares and service support for the fleet of Multix vehicles on the road.
The board of Eicher Polaris Pvt Ltd (EPPL) has passed a resolution to close operations of the JV firm with immediate effect, Eicher Motors said in a statement. The EEPL board met on 9 March, it added.
EEPL, which was an equal joint venture between Eicher Motors and US-based Polaris Industries Inc, was incorporated in October 2012.
As of 31 December, 2017, Eicher Motors' investment in the company stood at Rs 289.50 crore.
Eicher Motors said, 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.