Mahindra’s Plans for Peugeot Explained; No Job Cuts Assured!

Mahindra’s announcement of a 51 percent majority stake buyout of Peugeot Scooters did take a lot of us by surprise. While Mahindra two-wheelers has been trying its level best to make a mark in the Indian two wheeler segment, however, they can not really be called as ‘having succeeded’ in their attempts yet!

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Even the French manufacturer has been going through a rather gloomy tide. So between this, a 13 million Euro deal, may seem a bit rather eccentric, even by Mahindra’s records, but the company might just pull out a bumper gift hamper, just like the Tata-JLR deal.

While Mahindra had so far been selling rebadged Kinetic scooters, it has now finally managed to take out its first completely indigenous automatic scooter, the Gusto. This new deal will certainly help Mahindra’s technical prowess in their R&D.

As per a report on Business Standard, the two companies will be working on four key areas:

  • Product Development: This would most probably be the single most important sector in which Mahindra can learn loads from Peugeot thanks to their technological prowess.
  • Global Expansion: Being a team, it only makes sense to grow together. With sales dropping in the parent countries of both the companies, entry into more lucrative and greener pastures makes complete sense.
  • Mergers and acquisition: No surprises here also, as it seems that the companies will use each other’s shoulders to climb new heights
  • Brand Building: Last but not the least, both the companies need this the most and a healthy image boost will do wonders.

Even though Mahindra has bought a 51 per cent majority controlling stake, they would not be meddling in their affairs directly and just like SsangYong, even Peugeot Scooters will also be run independently. The Indian manufacturer has even declared that the Peugeot will remain in France and there will be no shifting of production to cheaper countries, thus protecting the jobs of nearly 800 employees of Peugeot. In fact the company has guaranteed that there will be no job cuts for at least the next two years.

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