Eicher Motors today said it will scrap its over five-year-old joint venture with US-based Polaris Industries Inc for manufacture and sales of personal utility vehicle, Multix, as it failed to meet sales expectations.
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 March 9, it added.
EEPL, an equal joint venture between Eicher Motors and US-based Polaris Industries Inc, was incorporated in October 2012.
In June 2015, the EEPL had launched Multix, a personal utility vehicle purpose-built for independent businessmen.
Given its unique positioning and differentiated product features, Multix initially generated significant interest from customers.
"However, the initial interest could not be sustained and the subsequent sales performance was significantly slower than the company's (EEPL) expectations," Eicher Motors said.
Explaining the reason for deciding to end the JV, the company said despite several initiatives, the EEPL'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 statement added.
As of 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, EPPL's net loss amounted to Rs 91.83 crore, 50 per cent of which was consolidated with the profit after tax of Eicher Motors.
In the coming days, the EEPL will engage with all its stakeholders including customers, suppliers, employees and channel partners to implement the closure, it said.
It will continue to provide spares and service support for the fleet of Multix vehicles on the road.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)