Wednesday, June 19, 2024
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INDIAN TAKEAWAY FOR PEUGEOT

Venerable French powered two-wheeler marque Peugeot Motocycles is set to follow Britain’s Jaguar Land Rover into Indian ownership. Automotive giant Mahindra & Mahindra, which already makes bikes under the Mahindra 2 Wheelers brand in India, is in advanced talks to acquire PSA Peugeot Citroen’s scooter business.

Although it only produces scooters these days, Peugeot was once a leading European motorcycle manufacturer. Most famously, a Peugeot-engined (but Norton-badged) machine won the inaugural Isle of Man TT twin-cylinder class in 1907, ridden by Rembrandt “Rem” Fowler. The company, which sold 79,000 scooters last year, has been bleeding money consistently for more than a decade. Its French engine plant was closed down two years ago and production concentrated in a single factory at Mandeure in eastern France, employing about 500 people. Some 50cc moped production is also contracted out to Qingqi in China.

Disposal of the scooter operation is among several strategic moves planned by PSA Peugeot Citroen chief executive Carlos Tavares, who took over in March with the remit of returning Europe’s second-largest car maker to profitability. On 14 September, Tavares told an an interviewer for the French radio station RTL that scooters were a drag on the group and a solution to end that burden would shortly be in place. Both Peugeot and Mahindra currently decline to comment on the deal.

“This shows that Tavares is willing to get rid of Peugeot’s remaining peripheral and loss-making activities in order to focus on core business,” commented Juergen Pieper, an analyst at Bankhaus Metzler in Frankfurt.

The acquisition would equip Mahindra & Mahindra, which launched its own scooter range in 2008 and has since begun manufacturing motorcycles as well, with cutting-edge technology as it seeks to compete against the likes of Hero MotoCorp and Honda in India’s burgeoning powered two-wheeler market, as well as established access to European markets.

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