Eicher-Polaris yet to decide the fate of JV plant in Rajasthan

Eicher Motors said it is yet to take a call on the future of the Rs 350-crore plant in Rajasthan it jointly owns with US-based Polaris Industries Inc.

After shutting down the venture two months ago, following recurring losses, questions remained over the fate of Jaipur-based plant that had an annual peak capacity of 120,000 vehicles.

The 50:50 joint venture company manufactured a passenger-cum-cargo four-wheeled utility vehicle - Multix - targeted at independent businessmen. The vehicle was priced at Rs 2.32 lakh. But lackluster demand led to withdrawal of the product from the market in less than three years.

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Speaking to Moneycontrol, Siddhartha Lal, managing director and CEO, Eicher Motors, said: 「We don』t have any agreed plans as of now (with regards to the JV plant). Right now we are focused on the closure (of the JV) part. We will have to resolve that at some point as to what to do with the plant and infrastructure but we don』t have an answer yet to it.」

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As of December 31, 2017, Eicher had invested Rs 289.50 crore in EPPL. The company recorded a loss of Rs 187 crore for the quarter ended March 31, 2018 on account of share of loss in the joint venture with Polaris. There were around 200 employees working for the JV company.

For the full year, Eicher Motors' loss deepened to Rs 220 crore, compared to Rs 46 crore reported in 2016-17, as per details disclosed by Eicher Motors earlier this month. Polaris had to write off Rs 134 crore for the March quarter.

Talking to reporters after announcing their quarterly results, Lal said that Eicher Motors would not explore any further opportunities in the four-wheeler passenger space anymore, and would instead focus on the two-wheeler (Royal Enfield), and truck and bus space (VE Commercial Vehicles).

But the prime focus will remain on the motorcycles.

「Absolutely (we are) not open to anything. We are absolutely 100 percent focused on motorcycles. Other than motorcycles we don』t have any intention to get into any other vertical," Lal said.

Slow going

The two companies joined hands in 2012 to explore solutions for mobility without elaborating details. Launched after a period of three years following a market study, the Multix was touted as India’s first personal utility vehicle. The purpose-built machine even doubled up to become an electricity generator.

Besides generating 3kW of power (enough to light small homes) the diesel-powered Multix also promised to deliver 28.45 km per litre of mileage.

By mid-2015, both companies poured Rs 350 crore into the venture, which included setting up of a 60,000 units (Phase 1) per year manufacturing plant in Jaipur as well as towards product development. But it clocked sales of 3,500 units in more than 30 months (less than 3 percent of its annual plant capacity).

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