Polaris Industries mulls two-wheeler tie-up with Eicher Motors

Jun 11 2013, 17:40 IST
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SummaryAfter BMW-TVS, Bajaj-KTM and Hero MotoCorp's tie-ups, US-based Polaris is now in talks with Eicher.

After BMW-TVS, Bajaj-KTM and Hero MotoCorp's tie-ups with three overseas technology experts, US-based Polaris Industries is now reportedly in talks with Eicher Motors, owner of Royal Enfield brand, for a new partnership for two-wheelers, multiple sources in the know told FE.

This comes as Polaris prepares to launch its 'Indian' and 'Victory' bike brands in India starting next year to compete with premium marquees like Harley-Davidson and Triumph.

All terrain vehicle-maker Polaris and Eicher are not unknown to each other. Last year, the two had invested R250 crore in a joint venture company (both partners have equal stake) for co-developing light passenger vehicles.

This JV aims to use an old and empty Royal Enfield facility near Jaipur, Rajasthan, where production is expected to start in 2015. This same facility could also be used by Polaris to assemble the 'Indian' bike range if the second partnership between the two is also agreed upon.

"While nothing has been finalised yet, discussions are happening on various matters, including extending the tie-up with Eicher to include bikes as well. Polaris is searching for a local partner, which it feels is necessary to be a significant player in India in the large two-wheeler segment. For this, Eicher is the first logical choice. It is eyeing Eicher's Rajasthan plant, which has been lying unused for many years now,” a source close to the development told FE.

When contacted, an Eicher Motors spokesperson confirmed that the old Royal Enfield plant in Jaipur will be used for the passenger vehicles business, but added that a tie-up in the two-wheeler front is “speculative and hypothetical".

The two wheeler tie-up is expected to give Polaris a local manufacturing base with much less investment than setting up its own plant, helping it target higher volumes through reduced prices — initial prices for fully-built imported models will be above R20 lakh, which will only be cut after local assembling starts.

Polaris may also get access to Royal Enfield's supplier network, helping it cut costs further and develop an India-specific model like Harley.

“At Polaris, all options are being discussed including making India-specific bikes and creating a local brand for India, since it's the world's largest bike market and a lot of global players are already keen to enter. But for this tie-up to work, both partners need to see benefit,” the source further said.

Additionally, Polaris could also develop a lower-priced bike jointly with Royal

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