Diego Graffi: ‘Piaggio is definitely looking at the 250cc-400cc motorcycle segment in India.’

In a freewheeling conversation at Auto Expo 2018, Diego Graffi, Piaggio Vehicles India’s CEO and MD, spoke to Amit Panday on introducing the Aprilia SR 125 and 150, readying the Storm for launch, and targeting full localisation when it enters the midsize bike market.

Here is the excerpt from the interview-

You have recently taken over the top position at Piaggio Vehicles India. What is your understanding of India's two-wheeler market?

Yes, I joined in June 2017 as the CEO and MD for the India operations. This country is not new to me because I was heading the procurement and purchase at the group level. So I had the opportunity to stay here in India for a few months. I have been visiting India frequently for business trips, meeting suppliers and for other jobs.

Definitely, when I was given the responsibility to join Piaggio India as the CEO, it was a big challenge. However, I was more than happy to accept the new responsibility as I love India, its culture and its people.

Piaggio unveiled four new products under its Aprilia brand — SR 125 and Storm scooters, RS 150 and Tuono 150 prototype motorcycles — at Auto Expo last month. 

What makes me most happy is the potential that I see in this market. It is a very fast growing market, not to mention that a lot of new trends are coming up in the two-wheeler segment. I also head the commercial vehicle business for Piaggio in India. I see a lot of new opportunities in the coming future and the India market will gain a more predominant role in Piaggio’s global business.

When Piaggio launched Vespa scooters in India, the brand spearheaded the premium scooter market and it remains that way. The Aprilia SR 150 expanded the category and brought volumes. What makes these brands command such distinct identity in India’s mass scooter market?  Secondly, what are your expectations from the new Aprilia SR 125 and the 125cc Storm scooter unveiled at the Auto Expo?

When we approached the India market for two-wheelers, we have taken a very clear choice of being always different from the other companies. By that I mean we try to provide riders with a unique riding experience. I think we have successfully managed to do this with the Vespa, which is a global brand. When we speak to our channel partners globally, it is very impressive to hear when they say that the consumers who enter our showrooms are not looking for scooters, they come looking for a Vespa.

Fortunately, with Aprilia, we have managed to replicate this success story. Definitely, it was a bet from our side because, as you say, the 150cc scooter and sporty scooter categories were non-existent. We are happy to see that we have created this category of scooters, which combine the practicality and easiness with performance. We had launched the Aprilia SR 150 in India just 18-20 months ago. The response from customers here has been very impressive. So that took us to the decision of introducing the 125cc version (Aprilia SR 125), which still follows the typical fun-riding philosophy of the Aprilia brand combined with more affordable engine solution.

Aprilia SR 150's runaway success helped Piaggio introduce the SR 125, which is targeted at aspirational commuters in India.  

The SR 125 is suitable for aspirational customers who want to own the Aprilia brand and are looking for a stylish and affordable scooter. It offers a wider seat for comfortable riding. The Aprilia Storm is very new and very unique (for India). It is not only for young riders but also for those who feel young at heart. It has got wider tyres and an attractive design language.

We have also introduced the connectivity feature, which is going to be an important pillar in our (new) product development strategy. It offers a new possibility to customers to interact actively with their vehicles through their mobile phones (via an app).

We collect consumer insights and we found that the new entrants into the scooter segment – buyers aged 18-21 years – got really excited about the Aprilia Storm scooter.

Based on the underpinnings of the Aprilia SR scooters, the Storm will offer a wide array of custom accessories.

We did a similar study before launching the Aprilia SR 150; introducing the SR 125 is completely based on the consumer demand. We also plan to soon launch an upgraded Aprilia SR 150, which will feature a digital instrument cluster and adjustable shock absorbers.

Does the company plan to commercially launch the Aprilia 150cc motorbikes (RS 150 and Tuono 150) in India?

Being a player in India with a brand like Aprilia, it is unavoidable. I mean sooner or later you will start thinking about a sporty motorbike. We decided to display them at the Auto Expo. Currently, they are prototypes, completely designed and industrialised in-house at Piaggio in Italy.

These 150cc Aprilia bikes are built following the spirit and fun-to-ride philosophy of the brand. We feel that these models (150cc Aprilia bikes) can be highly suitable for India and similar markets. So we are now doing our preliminary investigation to study the prospects (of small/mid-capacity bikes) in this market. A lot of work is going on in the backend on the motorcycle segment. If we plan to bring the entry-level motorbikes to India, they will come under the Aprilia brand and will be in two versions.

The company also displayed a prototype Aprilia RS 150 (above) and Tuono 150 at the Expo to gauge public response. 

More importantly, whenever we enter into this category, it will be for India and will be made in India.

How do you view the opportunities around the mid-capacity motorcycle segment in India?

Apart from the superbike segment, we are not present in any other motorcycle category in India at the moment. In my personal view, the 250cc-400cc motorcycle is the most interesting category. A lot of players are shaping up products or thinking of that category for the India market. So definitely, we are looking at that as we have a high level of interest, not only in the India market but in other global markets too. In South Asian markets and also in Europe, you will see a general trend of bike makers going after the mid-size motorcycle category.

Piaggio has around 150 MotoPlex stores in India. These retail stores are a standard concept for the company across the world.  

Whenever we plan to enter the market with these products, we will look at full localisation because we have to keep the prices affordable here.

As you said earlier, you have the experience of dealing with suppliers in India. What is your understanding of their preparedness to supply parts for such advanced products?

We are exporting all kinds of components (including electric and electrical parts) from India to Europe, Vietnam for many years. So I think whatever parts we will require, we will be able to find them here.

Suppliers always complain of cost pressures by their customers. At Piaggio, how do you negotiate the right costs for the desired quality of parts?

It’s not only the matter of costs, it is also a matter of standardisation, quality and outcome in terms of performance. But few reliable vendors qualify to (Piaggio’s) global level where they cater to our requirements. It is not purely the matter of costs. We feel that there is some excellence in terms of technology that is now available in India. So we have been able to qualify them and make them available for our requirements irrespective of location. Of course, the parts procured are for overall production volumes that include domestic and export batches.

For Piaggio globally, how critical are the India-based manufacturing operations currently?

I will say that the Indian manufacturing operations (for the production of two-wheelers, CVs and engines) are among the two main units for Piaggio globally. We are competing with our facility in Europe in terms of the manufacturing capacity.

Does the top management at the Piaggio Group see the India unit becoming a potential manufacturing hub for its global operations in future?

At the moment we are not the largest production plant at the Group level for two-wheelers. However, I do see that the potential of becoming one is there. But it is relevant to say that wherever we are present across the world, we are not really looking to be a mass player. Nevertheless, I feel that the potential for growth for us, not only in two-wheelers but also in commercial vehicles, is still very high. Luckily, we are growing in Europe as also in South Asia, Vietnam and other markets.

How is the Motoplex retail concept store working out for Piaggio’s multiple two-wheeler brands in India?

We wanted to be unique when we introduced the concept of Motoplex. This also means that every outlet that we open in India is a Motoplex store because our philosophy is to provide a premium experience to our customer from the moment when he has stepped into our outlet to the time when he returns to our service centre to get his bike serviced.

Piaggio has around 150 MotoPlex stores in India. These retail stores are a standard concept for the company across the world.  

At present we have about 150 Motoplex outlets across India. All these outlets follow the same concept (now) and the same specific standards that include corporate identity, store and workshop layout, the approach of the salesmen, type of services, customer experience and other critical parameters. Motoplex is a standard concept for Piaggio across the world.

Have you converted your existing scooter dealerships into Motoplex stores?

Yes, all our dealerships now look like Motoplex stores. They are all following our standard global CI (corporate identity). The difference is only in terms of size and the presence of different brands. So some stores have products from Vespa and Aprilia brands, some have vehicles from Vespa, Aprilia and Moto Guzzi brands. You can say that the scooter-only Motoplex stores are mini-format of the full-fledged Motoplex store(s).

Why would Piaggio convert its existing scooter dealerships into the mini form of what Motoplex stores stand for?

This is an attempt to redefine the brand identity and ensure uniformity across all stores not just in India but across the world. So if you visit any Piaggio (two-wheeler) dealership in India or anywhere else in the world, it will look exactly the same. Only the size and products on offer will vary.

(This interview was originally published in the 1 March 2018 issue of Autocar Professional)