Mahindra and Mahindra eyes Peugeot

MUMBAI: Mahindra Two Wheelers (MTWL) on Tuesday said that it is in the process of acquiring a 51 per cent stake in Peugeot Motorcycles (PMTC), part of the 54 billion euro Peugeot SA (PSA) Group based in France. PMTC is one of the oldest motorised two-wheeler manufacturers in the world and fifth largest in Europe.

The transaction between MTWL and Peugeot Scooters, subject to works council consultation, as part of the employee dialogue process and anti-trust law, would involve infusion of 15 million euro into PMTC to finance projects implemented through the strategic partnership. MTWL would pump in an additional 13 million euro to acquire shares from PSA in the secondary market, which will help MTWL to increase its stake to 51 per cent.

“Mahindra would offer access to the Indian market, mass market product technology and competence in marketing while Peugeot brings premium range, a strong European footprint and a globally recognised brand. The acquisition provides us a tremendous scope for gaining market share in emerging markets. It will help in exploring those markets more effectively than what we would be doing independently,” said Pawan Goenka, executive director, M&M.

On bringing Peugeot products into the Indian market, Mr Goenka said that his company is yet to evolve an India focused strategy.

“The Peugeot scooters are available at a price starting from 900 euros ('72,000) to 9000 euros ('7,20,000). At the current price level, it would be too expensive for the Indian consumers. We will have to first assess the volume potential at a particular price level before bringing PSA scooters into the Indian market,” he told reporters.

Following the strategic partnership, MTWL will have three members on the board of Peugeot Motocycles while PSA group will have two. However, he said that there are no plans to change the current management team at PMTC.