Report – PSA in talks with Mahindra for scooter unit sale image

Sources that have knowledge of the plans have reported to Bloomberg that Indian maker Mahindra & Mahindra is in advanced negotiations to acquire PSA Peugeot Citroen’s scooter business.

India’s largest producer of tractors and sport-utility vehicles looks set to expand its reach towards the very lucrative scooter market while PSA Peugeot Citroen’s CEO Tavares seems eager to streamline the business of the French automaker and focus on core activities.

“This shows that Tavares is willing to get rid of Peugeot’s remaining peripheral and loss-making activities in order to focus on its core business, ” said Juergen Pieper, a Frankfurt-based analyst at Bankhaus Metzler. “Plus, they still need some liquidity.”

Three persons tipped the impending move to Bloomberg and two of them – who declined to be named because they are not allowed to comment publicly on ongoing deals – said the announcement of the agreement could come sooner, rather than later.

Mumbai-based Mahindra has already started making scooters since 2008 and the addition of Peugeot Motocycles would levy important advancements through direct access to the western technology. Mahindra competes internally with Hero MotoCorp and Honda, with motorcycle sales jumping 23% during the last fiscal year.

Via Bloomberg