[mints21]

The Economic Times has reported that M&M is engaged in a discussion with European automobile major PSA Peugeot Citroen for several months to buy their scooter business.

The discussion revolves around sharing technology and a distribution tie up across geographies, both in Europe and India and other emerging markets.

Link to the News Item:

http://economictimes.indiatimes.com/...w/42633252.cms

M&M has clarified to stock exchange today that they do not comment on market speculations.

Though, it is not sure if such talks are indeed happening as they have been reported mere speculations by both the companies but if it is true then one can make out that M&M will now increase their focus on the two wheeler market.

It can be said that the two wheeler business has started receiving M&M's best attention.

The report further states that

The scooter business of PSA has been loss making unit for over a decade.

[anjan_c2007]

Mahindra had acquired a 80 % stake in M/s Kinetic Motors, to ride into its totally new arena of our two wheeler market. Mahindra entered the segment when all the big, international, two wheeler makers had already established themselves earlier through joint ventures and later on, a few of them created their fully owned ventures to make two wheelers.

Mahindra was already too late. The ol' saying goes "the early bird gets the worm". Mahindra is now getting no worms , as they have a current portfolio ( ghosts of the earlier Kinetic- Taiwanese two wheeler maker joint venture) that is almost unknown to the average two wheeler buyer. None of their models have set the sales charts afire.

Mahindra has almost run out of options and with a bid on the market pie, more and more models are being launched. A scooter model Gusto have been launched with a lot of contemporary ornamentation, but with lack of the sales USP. Mahindra believes that the last letter "O" in its model nomenclature will bring it luck ( like the Bolero, Scorpio, Genio, Maximo and so on) but the Verito, Xylo and Quanto are no best sellers.

Peugeot had a dismal presence in India. Its three attempts to enter India made it successful only in one among them, the other two bombing with disastrous outcomes.

The first foray was through Mahindra in the late 1970's, with the 2112 cc, Peugeot 4 cylinder 540 DP engine, that was hugely successful in Mahindra MUV's (launched around 1981) . Mahindra in the late 1990's also introduced the 2498 cc, 4 cyl, XD3P Peugeot diesel in its Voyager, Armada Grande and later on in the Bolero. A very tough workhorse ( I have used Boleros for 12 hours a day drives @ 70-80 kmph) the noisy and rustic engine is very reliable. The XD3P engine upgrade, powers MM550 DP jeeps, now used by our Armed forces. The basic engine had to be relegated to the backyard by M&M, as it could not be made complaint with the newer pollution norms. The engine has though helped Mahindra tread into newer CRDe technology pastures after upgrades ( for the Scorpio, new Boleros, Xylo and so on) with AVL of Austria.

The next foray of Automobiles Peugeot was through Chamundi Mopeds, Mysore, in 1984, which launched the Peugeot Sportif, a 65 cc moped. It tried to set a new benchmark. This moped priced at Rs 6500/- odd then had indicators, alloys, battery and a self starter. It was way ahead of its times. Other mopeds (mostly 50- 55 cc) were available then for below Rs 5 K.

The last foray was through Premier Automobiles Ltd, where it bought equity and developed a joint venture called PAL-Peugeot around 1993. The Peugeot 309 sedan ( of 1985 vintage) was launched in both petrol and diesel (GLD) versions. A no nonsense car, it had a very successful run in the gruelling African markets. But the car was outdated by design. Cars like the Maruti Esteem and Daewoo Cielo were ruling our "C" segment then. "New kids in town" expected were the Ford Escort and the Opel Astra, that had created a big pre-launch hype. The Peugeot 309 too bombed, soon starting a bitter war between PAL and Peugeot that landed up in the courts of law.

Sometime then, the diesel engine (XUD) doing its duty in the Peugeot 309 was sought by Maruti to power its Zen and Esteem. But these were not best sellers due to prohibitive pricing.

Now Mahindra,in 2014, in a very strategic move, is acquiring stake in the loss making subsidiary scooter arm of Peugeot. It plans to make new moves into the European scooter markets, among others. As Mahindra was struggling all through in the two wheeler segment, it remains to be seen as to whether the new Peugeot acquisition will allow it to gain a foothold in the two wheeler market.

More on this link:

http://www.autocarindia.com/auto-new...ek-390897.aspx

[Visran]

Very informative write up on Peugeot's attempts to enter our market, Mahindra has made it official now that they would be buying 51% stake in peugeot.

More on this: http://economictimes.indiatimes.com/...w/44574925.cms

[Autolock123]

Mahindra & Mahindra Limited has acquired controlling interest (51%) in PSA Peugeot Citroen’s scooter business unit, which involved investment of 15 million euros (Rs. 116.24 crores or $18.93 million approx.) for financing projects of Peugeot Motorcycles. More information about the deal is awaited.

Source Link - http://www.rushlane.com/mahindra-buy...-12133022.html

[amit_purohit20]

This clears one big bottleneck for M&M two wheelers and that is access to Engine technology.

M&M is known to transfer learnings faster across teams and it will help them soon to comeout with better products.

Not only this merger opens doors for M&M into high technology (comparitively) scooters but also will help them in launching new motorbikes.

With their earlier breakup with Engines engineering their plans were in jeopardy especially with no Engine technology in their kitty. This merger brings new hopes for M&M.

I wish them best of luck for their future products and hope they are able to also turn around the loss making Peugeot scooters into a profit making entity.

But Mahindra to make a real impact in Indian two wheeler industry is going to be tough with proven players around with each having their own USP...

Honda- Engine
TVS - Brilliant Chassis and light weight bikes. Upcoming BMW Technology???
Bajaj - Killer pricing, marketing and now access to KTM technology.
Hero - Lots of money,a brand name as big as Maruti, previous exposure to Honda quality systems and collaboration with Eric Buell thus bringing in new technology.

Offtopic - Forget Mahindra its not going to be easy for Honda to beat the heck out of other companies.