Piaggio brings Vespa back

In a couple of years from now, Italian scooter manufacturer Piaggio, which is currently known for its Apé range of small three-wheeler commercial vehicles in India, will bring in its first scooter offering into India with the launch of the Vespa LX 125.

The offering to be launched in 2012 will compete with products from Suzuki Motorcycles India which has the Access and two Mahindra 2-Wheeler offerings, the Duro, Rodeo and Flyte. The entry marks the third attempt by the company to enter the Indian market. Piaggio has had a chequered history in India starting from its joint venture with the Firodias in the 1960s to the JV with LML which came apart in 1999. The JV had introduced two offerings, the NV SPL and Select II.

With the announcement by Robert Colaninno, chairman of the board of directors of Piaggio & C. S.p.A, that a business plan has been approved for India, it is an indication that the Italian major now sees promise in India’s market. In addition, the performance of Piaggio’s three-wheeler manufacturing operation in India would have been factored into Piaggio’s decision to enter India.

Sales of Piaggio three-wheelers have increased from an estimated 35,000 vehicles to over 182,000 manufactured and sold in India in 2009, a press release from the Italian company said. Clearly, Piaggio will tap its three-wheeler vendor base as well as distribution network. Moreover, Piaggio’s Apé range has generated equity for the brand and the scooter offering will seek to leverage that. In that sense, the fortunes of the scooter may well ride on the equity that the three-wheeler business has generated.

Piaggio’s Vespa LX 125 will roll out from a new factory, the location of which has not been indicated. Its annual capacity will be 150,000 units and will entail an estimated investment of Euro 30 million over a two-year period. The company aims to earn revenues of Euro 70 million in 2015 when investment payback is projected on sales of 110,000 scooters. Meanwhile, Piaggio Vehicles is closely working on new one-litre and 1.2-litre diesel and turbo-diesel engines for new Piaggio commercial vehicles to be marketed in Europe and Asia.