Mahindra & Mahindra is in talks to buy the scooter division of the Peugeot, which has not been doing well in the last few years. This news has been reported by ET, who has been talking to someone very close to the development.
As per reports, the company has been talking to the French manufacturer for several months and the discussions revolved around sharing technology and a distribution tie-up across geographies both in Europe and India and other emerging markets. Both the companies however, declined to comment on this development saying that they do not comment on speculation.
The scooter division of Peugeot has been loss making for over a decade. In 2013, it sold 79,000 vehicles which was a gain of 8.2 per cent . The unit employs nearly 500 people in France and 300 people at a joint venture in China.
"M&M's keen interest lies in vehicle platform, hybrid and electric technology and for Peugeot it may be to get a toe-hold into India through two wheelers at a relatively lower cost and expand later into the car segment. There is a growing market for premium two wheelers in the country and Peugeot scooters could be an ideal fit for present and for the future," said a source to ET.
It is still unclear if Peugeot’s scooter business will be merged with Mahindra Two Wheelers after the acquisition, or a separate entity will be created. The premium scooter segment in India is growing in good numbers; credit Piaggio who was the first company to market its Vespa range of scooters so aggressively. The segment is not volume driven, but usually the profit margin is higher than the regular scooters. We look forward to hearing something positive from both the brands because at the end, it’s us – the consumers who will benefit from this acquisition.
