Mahindra Two Wheelers set to pick up majority stake in Peugeot Motorcycles
Six years ago, Mahindra had made its entry into the two-wheeler segment in India by acquiring Kinetic Motorcycles. It was a significant move back then. Fast forward to 2014, and Mahindra's now made an even bigger move\: it's set to pick up a 51 per cent of stake in France-based Peugeot Motorcycles.Yes, it is true that Peugeot's two-wheeler arm has been a loss-making entity for the better part of the last decade. However, this seems to have worked in Mahindra's favour, as the PSA Peugeot-Citroen group has apparently made up its mind about entering into a strategic partnership with a company that has the reach (and the funds) to help bring the business back to its feet, and help it grow. Mahindra happened to be in the right place at the right time, and so the offer.Mind you, the deal hasn't gone through just yet. The deal is subject to a consultation with Peugeot's Works Council, but it's a mere formality. Once talks end, Mahindra will invest 15 million (Rs 115.7 crore) for projects that are to result from this partnership.
If you didn't know, Peugeot has been making two-wheelers for a long time. It's actually credited with the creation of the first motorised two-wheeler, a fair way back in 1898. Currently, Peugeot Motorcycles has a massive range of scooters with engine sizes ranging from 50cc to 400cc. It also makes a fully-electric scooter, a three-wheeled scoot (the Metropolis 400, which is hugely popular in France), as well as a moped.Speaking on the development, Dr. Pawan Goenka, Executive Director, Mahindra \& Mahindra said, “The coming together of Mahindra and Peugeot is a win-win for the two-wheeler businesses of both companies. Mahindra would offer access to the India market, mass market product technology and competence in marketing while Peugeot brings premium range, a strong European footprint, and a globally recognized brand. This partnership would enable both Mahindra Two Wheelers and Peugeot Motorcycles to speed their international expansion by driving synergies and leveraging respective strengths of both parties”.Mahindra, despite having been in the two-wheeler business for a number of years, hasn't quite had the sort of impact it'd have hoped for. Things are looking up for the Indian manufacturer, though, with the launch of the all-new, developed in-house Gusto. Mahindra's striking while the iron is hot - it's looking to grow its footprint in the burgeoning scooter market in India, and also in markets abroad. Peugeot too would like a piece of the Indian market, and joining hands with Mahindra gives it access to M\&M's vast outreach, mass market technologies and of course, the money. A true win-win situation, this one.Providing support to Peugeot's global growth plan and brand-building is also Mahindra's responsibility, and the company has maintained that it will stick with Peugeot Motorcycles' current leadership, just like it did when it acquired SsangYong.Good move, TopGear.commers?