An Autocar Professional exclusive story. 

Mahindra Two Wheelers, the two-wheeler subsidiary of Mahindra & Mahindra is likely to acquire Peugoet's scooter business later this week, our sister-magazine Autocar professional has found out with the option of having full ownership later.

M&M had earlier entered into the two-wheelers market by acquiring an 80 percent stake in the Pune-based Kinetic Motor Company.

Currently, Peugeot is undergoing a major financial restructuring drive, which may have led it to divest stake in its scooter business. The deal between the two companies should be considered a strategic move by both - Peugeot and M&M.

The deal may also facilitate Peugeot Scooters' entry into emerging markets through M&M. The move may give the Indian company's technological capabilities a huge boost, as well as a foothold in the European markets, not to mention added sales figures.

However, the deal to acquire the reportedly loss-making Peugeot scooters also means an additional challenge for Mahindra Two Wheelers, which is already fighting to turn profitable in an extremely competitive industry.

Currently, M&M is a marginal player in the Indian two-wheeler market with a market share of only one percent. The company recently launched a new scooter called the Gusto, which is also aimed at export markets in South Asia, Central America and Africa.