Eicher and Polaris join hand for a 50:50 Joint Venture: Are we looking at cheaper ATVs?
Indian business conglomerate Eicher, which has business interests including commercial vehicles, tractors and retro motorcycles, has signed an agreement to enter into a 50:50 joint venture with American brand Polaris. Polaris, like Eicher has interests in a range of personal mobility vehicles like ATVs, motorcycles and snow mobiles. While Eicher sells the Royal Enfield range of retro motorcycles, Polaris owns the Victory and Indian brands of cruisers. For now though, the joint venture remains non committal on what exactly Eicher and Polaris will manufacture at the new greenfield facility that they plan to establish in India.
Eicher and Polaris will jointly invest about USD 50 million to set up the manufacturing facility that will serve both the Indian as well as export markets. The factory is expected to become operational by 2015. The key takeaway here is the fact that local manufacture of Polaris’s range of ATVs will lead to much lower prices. Also, access to high quality, low cost labour could allow Polaris to build its All Terrain Vehicle(ATV) range at a much lower cost. An alliance akin to what Bajaj Auto has with KTM could be the potential of the Eicher-Polaris tie up.
So, keeping all these factors in mind, it seems that Eicher and Polaris have tied up to manufacture ATVs in India. Polaris already has a presence in the Indian market, with the American brand showcasing its ATV range at the 2012 Indian Auto Expo. However, the high price of Polaris’s ATVs due to the CBU import duty, has meant that the brand is seeing slow sales. In India, ATVs cannot be ridden on public roads as they are classified for pure off road use for applications like farm use and recreational activities.
Due to this, most ATV enthusiasts, except the very well heeled ones aren’t buying the ATVs owing to the high initial cost and limited potential of use for day to day commuting activities. However, the local manufacture of ATVs would mean that this class of vehicles would become much more affordable and then perhaps, more Indian ATV enthusiasts would take the plunge into off roading. Motorcyclists in India would also be hoping that the Eicher tie up with Polaris results in the Victory and Indian range of cruisers being available in India at competitive prices, rivaling that of the Harley Davidsons.