Mahindra Eyeing Premium Scooter Segment; Might Acquire Peugeot Motorcycles

If the latest rumours are anything to go by, Mahindra & Mahindra Ltd. (M&M), the nation's largest utility vehicle maker, is said to be considering buying PSA Peugeot Citroen's scooter business. Though sources familiar with the development said the company might make an announcement soon, Mahindra refused to comment on the report.

Mahindra has also been in the business of making scooters since 2008, though it faces tough competition from Hero MotoCorp Ltd. and Honda Motor Co.. With scooter sales growing by 23 per cent in the last financial year, M&M's wish to find access to technology befitting this increasingly competitive market makes sense. That said, the deal will also help the company gain access to global markets.

Here's an analogy to help you understand this better. Mahindra brought in the Ssangyong Rexton to the Indian market despite the fact that they had two cars in the same segment, i.e. the Mahindra Scorpio and the XUV500. The idea behind Rexton was to gain a premium edge and more volume in the aforementioned segment. Similarly, Peugeot will help M&M gain that much-needed edge, quite like the Vespa.

The deal will come as a respite for PSA Peugeot Citroen, since Peugeot Motorcycles has only posted losses in the last decade.

That's all we know about the apparent Mahindra and Peugeot affair for now. We'll keep you posted about further developments, if at all.