Polaris Forms Joint Venture, Will Expand in India
Medina-based Polaris Industries, Inc., on Tuesday announced a joint venture through which it plans to develop and market vehicles in India.
Polaris and New Delhi-based vehicle and motorcycle manufacturer Eicher Motors Limited will together form a company that will make and sell a new line of personal vehicles for India and other emerging markets.
Polaris and Eicher will each own 50 percent of the new entity, which will be based in India and governed by a board that has equal representation from both companies.
Polaris spokeswoman Marlys Knutson told Twin Cities Business that a name for the joint company and the city where it will be based have not yet been determined.
The two companies will together invest approximately $50 million over the next three years and open a manufacturing facility in India, where they expect to start production in 2015.
Founded in 1982, Eicher has more than $1 billion in annual revenue and a dealer network of more than 400 locations in India, according to Polaris. The company makes a line of motorcycles called Royal Enfield and, since 2008, has been part of a joint venture with Sweden-based Volvo through which the two companies manufacture and market trucks, buses, and engineering components.
Polaris, which makes off-road vehicles—including all-terrain vehicles (ATVs), snowmobiles, and motorcycles—and on-road electric-powered or hybrid vehicles, currently exports some of its products to India. However, it doesn’t yet have any manufacturing facilities in the country.
“This agreement instantly expands and enhances Polaris’ presence in India and . . . additional emerging markets around the globe and leverages Polaris’ strength in product innovation and vehicle development,” Polaris CEO Scott Wine said in a statement. “Eicher’s financial strength and rich history as a leader in the Indian market makes them the perfect partner for Polaris in India. This joint venture represents an incredible opportunity to develop new vehicles and realize global growth.”
In addition to announcing its joint venture, Polaris on Tuesday reported record second-quarter financial results and raised its full-year forecast. For the quarter that ended on June 30, the company earned $69.8 million, or 98 cents per share—up 43 percent from the same quarter last year. Revenue for the quarter totaled $755.4 million, representing an increase of 24 percent over last year’s second-quarter sales.
The company now expects 2012 earnings of $4.05 to $4.15 per share, up from its prior forecast of $3.85 to $4 per share.
Polaris is among Minnesota’s 25-largest public companies based on revenue, which totaled $2.6 billion in 2011.