Piaggio plans larger scooter portfolio for India beyond Vespa

Michele Colaninno, Chairman and Chief Executive Officer, Piaggio India

<p>Michele Colaninno, Chairman and Chief Executive Officer, Piaggio India </p> — Michele Colaninno, Chairman and Chief Executive Officer, Piaggio India

Mumbai: Italian automaker, Piaggio, will expand its scooter offerings in India beyond Vespa, said Michele Colaninno, Chairman and Chief Executive Officer.

“As for as India is concerned, I’m satisfied we have done a good job and can do it better. We will do better in the medium-to-the-long term because we will enter new markets on two-wheeled vehicles. So not just the Vespa and the previous medium-range bikes, but also other scooters for mobility,” he elaborated.

The CEO made these comments at a recent Q&A session with analysts following the declaration of the full year results for fiscal 2024. He added that Piaggio was also retailing three-wheeled electric vehicles with new ones coming out in the “next and coming months in India, especially on the light mobility of goods”.

However, the bigger play is clearly in two-wheelers where India is the world’s largest market and also “very interesting” from Piaggio’s point of view. “It is starting to enter a value (category) that we can be competitive in, so we will localise, produce and sell in India. Some export markets are interesting for sure,” continued Colaninno.

Eyeing Africa

Europe and the US will largely continue to be serviced by Italy while Asia’s needs are already being met by Vietnam, Indonesia and China. Going forward, India could play a role in catering to emerging regions in Africa.

Bajaj Auto and TVS Motor are already seeing good growth in African countries where the initial craze for Chinese bikes has dissipated. Whether Piaggio can also deliver cost-competitive motorcycles and scooters from India will be its biggest challenge.

Colaninno had already indicated in an interactive session with analysts following the first half results last year that Piaggio needed to get into the mass scooter segment in India. This was largely because Vespa and Aprilia’s volumes were little to write home about.

“The mistake we have done in the past is more on the scooter side, where we have not been able to face the competition of low-cost vehicles. We have put in place a new team that will start from now, especially to target those kinds of vehicles,” he said.

During this session, Colaninno spoke of rivals like Honda and TVS which produced “millions and millions of” vehicles. “You cannot compare us with Honda, obviously, which has been there in the two-wheeler market for years in India. But I think that we will take the right decisions to be ready and to enter the big volume market there. Not with the Vespa, not with the bike,” he added.

Piaggio was, therefore, putting in place a new strategy for India which would include a revised organisational chart to be able to catch up on opportunities. Colannino was equally categorical that the focus on premium models would continue especially when recently launched models such as the Aprilia RS 457 medium displacement bike had been well received.

Continuous but slow growth

From his point of view, India was showing “positive momentum for the time being” which was welcome news. “We are happy with the growth in India that is continuous but slow. I prefer to manage this kind of situation instead of the hysteria that we have in some other parts of the world. If you take China for instance, if you take Vietnam for instance. So India, I’m still positive,” said the Piaggio CEO.

It was also during this session that Colaninno said he was not in favour of tariff levies which the US has recently imposed on auto and parts imports to the extent of 25per cent . “I think that to be fair and competitive in a world of costs, everybody should produce in the same place. So, I would prefer that to be in a fair market, you have to have the same cost basis,” he elaborated.

According to Colaninno, it would not be particularly “intelligent” to go into the mass market or to fight on cost basis. “If we produce in Europe, we stay in Europe, if we produce in Vietnam, we stay in Vietnam. So I don’t see any close down of factories around the world. I don’t even see any new investments for new factories, because we have enough and we are in the right place in the right momentum,” he said.

Investing in technology

Getting back to the latest Q&A session held in early March, Colaninno said he was totally convinced that in the world of today, any company must invest in technology.

“If you do not, you will lose the opportunity to attract customers that are interested in technology. We are investing in software, we are investing in capability for verticalisation of some components that we think are crucial for our engines and our vehicles,” he added.

The idea is to be ready whenever Western countries seek this kind of technology. He referred to China’s relentless focus on electric vehicles and to the fact that it was leading on exports and investing a lot in technology.

“It is a technology that we are investing in but the market is still marginal. A marginal market means that the breakeven of the volumes you have to achieve on these cheap vehicles in China is two million (units). It is not our strategy to go into a marginal business…we do not want to enter the Chinese marginal market,” reiterated Colaninno.