Piaggio plans making India its global manufacturing hub

Subhadip Sircar

Mumbai, Aug 31: Italian two-wheeler major Piaggio is planning to make the Baramati plant of the erstwhile Piaggio Greaves Vehicles Ltd (PGVL) its only three-wheeler manufacturing facility globally. This will, however, depend on how Piaggio is able to bolster capacity at the Baramati plant. Currently, Piaggio has another three-wheeler manufacturing plant in Italy which caters to the European market.

“Our vision and ambition is to make the Indian sub-continent the hub for design and manufacture of all types of vehicles,” said Piaggio Vehicles Ltd chairman Shekhar Datta.

PGVL has been renamed Piaggio Vehicles Ltd (PVL) after Piaggio brought the LM Thapar-promoted Greaves Ltd’s 49 per cent stake in the joint venture for a consideration of Rs 31.5 crore.

Mr Datta, however, categorically said that there would be no change in the management structure following the acquisition of the Greaves stake. Piaggio is in the process of pumping in another Rs 80 crore to ramp up capacity at Baramati from the current level of 25,000 units per annum to 50,000 units by the end of next year.

The total investment in the capacity expansion works out to Rs 150 crore, including the Rs 80 crore which has been funded by the Italian parent. Mr Datta added that PVL would ideally like to have a capacity of one lakh units annually. PVL is the leader in the cargo three-wheeler segment in India, with a market share of around 45 per cent. The company currently exports its three-wheelers primarily to the African and South American markets.

The range of Piaggio commercial vehicles would be technologically supported by Lombardini, another Italian company which had acquired the Greaves factory in Aurangabad to produce diesel 422-cc engines for the new product range from PVL under licence from Piaggio. PVL, which currently manufactures the p501 model will be introducing the p601 model subsequently, Mr Datta added. The company is also in the process of introducing CNG engines for both its passenger and cargo range of three-wheelers.

Mr Datta added that Lombardini would be manufacturing the engines for this range. Pointing out that there was a lot of pent-up demand, Mr Datta said that even by modest estimates, the three-wheeler segment would have a growth rate of 5 per cent to 7 per cent. PVL manufactures the Ape range of three-wheelers, of which customised cargo three-wheelers is the most important constituent. PVL plans an expansion of the product range with the introduction of new three and four-wheeled commercial vehicles with diesel, four-stroke petrol/gas engines.