Vespa may be down but is not out

Vespa sales in India may be flat at a little over 2,000 units each month but Piaggio will have reason to be hopeful about the growth of its premium scooter brand.

This optimism stems not only from the fact that the country is the largest producer of two-wheelers worldwide but is also seeing a rapid market transition from motorcycles to scooters. The challenge remains in the form of stiff competition from Honda, TVS Motor, Suzuki and Yamaha.

In its global interim report published recently, the Italian automaker has noted that India’s two-wheeler space saw a downturn of 0.2 per cent in the first three months of 2015 compared to the same period last year.

This market decrease was due to a 6.4 per cent fall in the motorcycle segment compared to the first three months of 2014, while the scooter segment registered an 18.2 per cent increase in the same period. According to the report, Piaggio will focus on an increase in Vespa products and launch new models in the premium scooter and motorcycle segments.

During the first quarter of 2015, the Group sold 74,200 two-wheelers worldwide with turnover up in all geographical segments. This performance, boosted by the devaluation of the euro against Asian currencies, was possible due to a shift in sales towards the Group's premium products.

In the European market, Piaggio achieved a share of 13.1 per cent in the first quarter of 2015 (15 per cent in Q1 of 2014) with leadership position in the scooter segment (19.7 per cent). In Italy, the Group was also ahead in scooters with a share of 28.1 per cent.

In Vietnam, Piaggio scooters increased volumes by 5.2 per cent in the first quarter of 2015, compared to the same period last year. The Group retained its strong position in the North American scooter market where it closed the year with 23.2 per cent. It plans to grow its profile in motorcycles through the Aprilia and Moto Guzzi brands.

Going forward, Piaggio will consolidate its leadership position in Europe by targeting growth in motorcycles with the restyled Moto Guzzi and Aprilia ranges. In Asia-Pacific, it will explore opportunities in medium and large sized motorcycles and replicate the premium strategy for Vietnam throughout the region. During 2015, adds the interim report, direct sales activities of the Group will be consolidated in China with the aim of penetrating the premium two-wheeler market.

In the commercial vehicle space, Piaggio’s Indian arm sold 37,262 three-wheelers in Q1 (38,228 units in 2014). The Indian arm also exported 4,381 three-wheeler vehicles (5,481 in Q1 of ‘14) with the downturn mainly due to a slowdown in sales of some African countries.

In four-wheelers, Piaggio’s sales in Q1 fell by nine per cent to 1,611 units after a ‘strong downturn in demand’. In overall terms, states the interim report, the Indian subsidiary registered a turnover of €78.4 million in Q1 of 2015, compared to €66.1 million in the same period last year.

In the Indian three-wheeler market, Piaggio has a market share of 32.2 per cent (33.1 per cent). Detailed analysis of the market shows that the Group has maintained and consolidated its market leader position in the goods transport segment with a market share of 54.1 per cent (49.7 per cent). Its market share, although decreasing, remained steady in the passenger segment at 25.9 per cent (28.2 per cent).

Piaggio also operates in the Indian four-wheeler light commercial vehicles market (cargo vehicles for goods) with the Porter 600 and 1000. Its share went up to 5.1 per cent (4.6 per cent). It plans to increase commercial vehicle sales in the country with a further development of exports to Africa and Latin America.