PSA Peugeot Citroen has confirmed that it is to dispose of a majority stake in its Peugeot scooter subsidiary to Indian automotive and powered two-wheeler manufacturer Mahindra & Mahindra (M&M).
According to a statement issued by the French parent company, under the terms of what it describes as a “partnership agreement”, M&M will purchase €15million worth of shares to finance strategic projects and also acquire shares in Peugeot Scooters held by PSA. Following these transactions, M&M would hold a 51 per cent interest in the business.
To sweeten this deal in the eyes of Peugeot’s heavily-unionised French workforce at its Mandeure plant, management has also submitted a plan to the Peugeot Scooters’ Works Council, promised to revive the business and strengthen the brand and its products. This involves subcontracting out certain manufacturing and logistics operations, and deploying a programme to align jobs and skills — featuring in particular a “voluntary senior leave scheme” for around 80 employees (in other words, redundancies for older workers). In addition, it will be hiring young recruits on work-study contracts and negotiating a performance agreement with employee representatives that should make the launch of a new vehicle possible in 2017.
Following the announcement, Peugeot Scooters managing director Frédéric Fabre said, “This morning I discussed a plan with our employee representatives that offers a promising future for Peugeot Scooters. The first step will be to introduce the recovery plan, which is absolutely vital. The second stage is the strategic partnership with Mahindra & Mahindra Group, which would give us the chance to speed our geographic development. Together, let’s make sure we write the next chapter in our story by seizing these opportunities to secure the future of Peugeot Scooters and maintain operations at the Mandeure site.”