Eicher teams up with Polaris to enter passenger vehicle segment

After commercial vehicles and motorcycles, Eicher Motors is now going to enter the passenger vehicle segment. It has signed a strategic 50:50 joint venture agreement with the US-based Polaris Industries, a leader in the powersports industry, to set up a greenfield project in India. The JV company will design, develop, manufacture and sell a full new range of personal vehicles suitable for India and other emerging markets. The companies have not disclosed which segment of the passenger vehicle industry they plan to enter with the new JV.

A spokesperson, however, told our siser magazine Autocar Professional that the products from the JV “will not mirror any existing product from Eicher or Polaris”. Motorcycles are the only personal vehicles that Eicher produces through Royal Enfield. Polaris has a wide range of off-road vehicles (ORVs), including all-terrain vehicles (ATVs), motorcycles (Victory, Indian) and on-road electric/hybrid-powered vehicles that are available for personal use.

This agreement envisages the creation of a JV company with a 50-50 partnership between the two companies. The manufacturing facility will be located in India and the JV partners are currently evaluating locations to set up the facility. The expected start of production is 2015. The overall investment in the project over a three-year period will be approximately Rs 250 crore.

“We see a strong alignment of values and vision between Eicher Motors and Polaris Industries, along with a capability set that complements each other very well. The joint venture company brings together Eicher’s proven expertise in frugal engineering, lean business model and in-depth understanding of emerging markets with the excellent product development capabilities and world-class reliability of Polaris. This will ensure that the products from the joint venture company, when launched, will set new benchmarks in optimal customer value,” said Siddhartha Lal, MD and CEO, Eicher Motors.

Speaking at the signing ceremony, Scott W Wine, CEO, Polaris Industries, said: “This agreement reinforces Polaris’ position as a global leader, instantly expanding our presence in India and our access to additional emerging markets around the globe. Eicher’s financial strength and rich history as a leader in the Indian market makes it the perfect partner for Polaris in India. This joint venture provides both companies incredible opportunities to develop new products and realise global growth.”