(Oct 7): Mahindra & Mahindra Ltd. offered to buy a 51 percent stake in French carmaker PSA Peugeot Citroen’s scooter business, giving the Indian tractor manufacturer access to European technology to expand in the two-wheel models.

The Mahindra Two Wheelers Ltd. division will invest 15 million euros ($18.9 million) in Peugeot Motocycles (PMTC), the Mumbai-based company said today in a stock exchange filing.

Mahindra, which began making scooters in 2008 after acquiring Kinetic Motor Co., is seeking to compete with Hero MotoCorp Ltd. and Honda Motor Co. in India’s growing two-wheeler market. Sales of scooters surged 23 percent in the year ended March in the country where two-wheel vehicles outsell cars by about six to one.

The deal is among the first major strategic steps by Peugeot Chief Executive Officer Carlos Tavares, who took charge in March and is seeking to return Europe’s second-largest automaker to profit. The Paris-based company’s scooter business has posted losses for a decade as it struggles to compete with Piaggio & C. SpA, the European leader in the models.

Peugeot fell as much as 1.3 percent and was trading down 1 percent at 10.23 euros as of 9:40 a.m. in Paris. Mahindra dropped 2.4 percent to 1,356.75 rupees in Mumbai.

PMTC’s efforts to return to profit include eliminating 80 jobs through voluntary departures for workers close to retirement age, the unit said in a separate statement. The division will subcontract some production and logistics operations and negotiate performance targets with employee representatives to prepare for introducing a new vehicle in 2017.

The Peugeot scooter business, which has 488 employees in France and about 300 workers at a Chinese joint venture, increased deliveries 8.2 percent to 79,000 vehicles in 2013.

Peugeot closed an engine plant for the scooter business at the end of 2012, concentrating manufacturing at a factory in Mandeure in eastern France. Part of its turnaround plan was the three-wheeled Metropolis, which went on sale last year. The original target of making 7,000 of the model a year has been scaled back to 4,000.