Mahindra Buys 51% Majority of Peugeot Motorcycles

Peugeot Metropolis 1 photo
Photo: Peugeot
Indian automotive giant Mahindra has finalized the acquisition of a 51% majority in the scooter division of Peugeot Citroën Automobile Group (PAS), as it was rumored in September 2014. The price of the transaction is €15 million ($17.45 mil) and the new board of Peugeot Motorcycles is already installed, comprising three members appointed by Mahindra and two by Peugeot. This move follows Mahindra’s $463 million (€398 mil) investment in Ssang Yong back in 2010, when the Indian group took over a majority stake in the South Korean manufacturer.
Mahindra is on a real expansion spree, as even before the acquisition of Peugeot’s motorcycle division, it had opened an assembly line for electric two-wheelers in the United States, as well as a new research center for electric mobility.

Peugeot’s growth was not enough

Peugeot’s scooter business was slowly growing, having sold around 79,000 units in 2013, a neat 8.2 percent increase over the previous year, but it looks like this was nowhere near what PSA needed to cover for the massive losses the company had up to that point.

Now, Mahindra is a completely different story, and has all the prerequisites to transform the destiny of Peugeot into an equally successful business. The Indian maker has recently reached the 5 million units milestone and has a very strong presence in both the local market and in other countries in Asia. Its intentions are to obtain a strong foothold in Europe and the US, as well, and in this direction, gaining access to Peugeot’s dealer network and existing technologies is a huge step.

For the French, the tie-up will also be a breath of fresh air. Peugeot currently employs around 500 people in France, with some 300 more in a Chinese joint venture. The money will sustain the development of the current and future models, which will also be entering the vivacious Indian market, the second-largest in the world, by volume.

It will definitely be interesting to watch how Peugeot evolves from this point on. As for Mahindra, they are surely going to make the most of the technologies they now have access to after gaining control of Peugeot. Judging by their bold presence in Moto3, they are anything but shy of claiming a bigger slice of cake in the two- and three-wheeler industry.
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