Both Mahindra and Peugeot also build scooters, under in-house operations that carry slightly different names to their respective carmaking businesses.
So it’s effectively Mahindra Two Wheelers looking to purchase a stake in Peugeot Motorcycles, but each is owned by Mahindra & Mahindra and PSA Peugeot Citroen respectively.
A report by Business Standard quotes a 13 million euro (AU$18.9 million) offer from Mahindra for the 51 percent stake, along with a 15 million euro (AU$21.8 million) commitment for future product development.
Mahindra’s likely motivation for acquiring a majority stake in Peugeot would be to access the latter’s arguably superior technology and styling skills, while also giving Mahindra a vastly-improved market ‘reach’.
The Indian bike-builder is currently in a loss-making phase business-wise - as is Peugeot Motorcycles - but Peugeot is current debt-free.
The new-look board for the combined scooter company would feature two members from Peugeot and a majority three from Mahindra, but Peugeot would be responsible for running the business.
Peugeot’s models would continue as is and form the ‘upmarket’ part of a two-tier sales plan, with Mahindra focusing on more affordable models.
Mahindra has reportedly stressed that it is not looking to expand beyond a 51 percent stake in Peugeot at this stage, but whether this new arrangement will ever expand into the business of carmaking or not is unclear.
Peugeot scooters were once sold locally via an importer but have not been offered for several years, while Mahindra’s two-wheeled vehicles have never officially been sold in Australia.