Only this time it will cost roughly 50% more than it did in 1999

The Vespa LX, one of Europe?s largest selling scooters, is Italian scooter and motorcycle maker Piaggio?s third crack at the Indian market, 13 years after its last attempt. Once again the company has framed its strategy by putting faith in the capability of the 66-year-old Vespa brand to command a premium.

Priced at R66,661 (ex-showroom, Maharashtra), the Vespa LX costs nearly 15-20% higher than the competition, which includes the like of Honda Activa, Suzuki Access, TVS Wego and Mahindra Duro.

The company, as of now, is not looking at volumes, and understandably so. ?We are not going to be selling a million units a year like some of our competitors,? says Gabrielle Galli, Piaggio?s group chief financial officer. ?But what we are looking for is good profit margins from the premium that we can command.?

Consumers have always paid slightly more as compared to the other brands for the Vespa, which has had the perception of being a more powerful, refined and youthful machine. This time, in addition, the attempt by Piaggio is to create a new premium segment. ?Fashion? and ?brand conscious? buyers are our target consumers, according to Ravi Chopra, chairman and managing director, Piaggio Vehicles Pvt Ltd.

Such a customer focus can at best give the company a 12% market share of the 2.5 million unit scooter market in India by 2013, as per Piaggio?s targets. At its peak, Piaggio with LML had a 28% market share in the mid-1990s with the help of the LML Vespa NX.

It is the success of the mid-1990s that further adds to the optimism being shown by the company. From the 1960s to 2006, Vespa and Vespa-inspired scooters were the first vehicle of many Indians.

Today, the Vespa riders of the 1980s and 1990s have had children of their own. ?The new generation aspires to own a brand like Vespa,? says Harish Bijoor, chief executive officer, Harish Bijoor Consults Inc. ?The attractive retro styling attracts the youth and the fact that a Vespa is most likely the first vehicle of their parents adds to the charm.?

For the price, you get a 125cc, 4-stroke scooter with maximum power of 10bhp@7,500rpm. It?s a smaller engine than what powered the older Vespa. Although FE hasn?t done a full road test yet, initial rides reveal that the Vespa?s engine and ride quality have the refinement expected from the Italian brand.

The looks too are very much Italian. A stylish, retro look is splattered with glittering chrome finish. The range of colours available for the scooter makes it acceptable for just about anyone.

The experience of owning a premium brand will also be spread over to the dealerships. ?Distribution partners will be hand picked and each Vespa store will look like a boutique,? Chopra says.

In both car and motorcycle markets in India, there is a clear distinction between the premium and affordable segments. Brands such as Harley Davidson and the about-to-be-launched Triumph are the best examples of high-end motorcycles. But the high-end bikes are generally those that have much larger engines and much superior performance.

In Vespa?s case, however, the performance, at least on paper, is similar to the competition.

Brand consultants, however, disagree. ?There are many other success stories like Rajdoot and Royal Enfield that garner a premium because of the associated retro feel,? says Bijoor. ?Vespa is a well known brand with a retro feel and Italy is in its DNA, and since the premium segment does not exist in the scooter market, Vespa can benefit from being the first mover,? he adds.

?Aspirational value of the brand Vespa is quite high,? says Ramanujam Sridhar, chief executive officer, brand-comm. ?Let?s not forget, there are some brands for which people will pay extra. Vespa has the potential become one of those.?

Vespa, in its 2012 avatar, primarily seeks to connect with the youth. Through the company?s initial internet-based marketing campaigns, the scooter is being portrayed as a fashion accessory.

Piaggio has also chosen not to go in for a brand ambassador and instead aims to make ?Vespa? the hero in its marketing campaign.

The two brand consultants quoted in the story say it?s a right move not to have a brand ambassador for Vespa.

?The real hero here is the scooter,? says Bijoor. ?So, to that extent, Piaggio is right not to have a brand ambassador. Often a brand ambassador overshadows the product, which would not have been the right move in this case.?

Sridhar says that brand ambassadors are ?overstated?. ?Brand ambassadors are needed when the product is not good enough to differentiate it from the competition,? he says. ?But if the product is so good, why bother??

The Vespa brand goes beyond the product. The history of the iconic brand together with the Italian product quality will most likely make a potential Vespa owner ask ?Do I want to buy a Vespa?? rather than ?Why pay so much for a scooter that performs similar to its relatively inexpensive competition??

Piaggio will hope the strategy of going after a premium segment, that doesn?t yet exist, proves to be right.

Whatever the case, Vespa, the scooter that looks like a wasp, is back in India. Barely three years after Bajaj Auto stopped production of its iconic scooter Chetak and put scooters out of fashion, Vespa is set to make scooters sought after again.

Some interesting facts about Vespa

* Vespa was designed by Corradino D?Ascanio who also designed Italy?s helicopter around WW II.

* The designer of Vespa had immense hatred for motorcycles and he believed that they were bulky, uncomfortable and unreliable.

* Enrico Piaggio, the Italian industrialist, said ?Sembra una Vespa??Resembles a wasp?which was the origin of the name Vespa.

* Vespa has featured in movies such as Roman Holiday, The Talented Mr Ripley and recently in Larry Crowne featuring Tom Hanks and Julia Roberts.

* The first design of the Vespa was done after drawing a person sitting comfortably on a sofa in his drawing room and the scooter was designed around him.

* The first Vespa model was called Paperino?Italian for Donald Duck.

* Vespa has over 150 communities and clubs across more than 30 countries.

Source: http://www.vespaindia.com