Piaggio to bring Vespa brand back to India in mid-2012

Written by Nanda Kasabe | Pune | Updated: Jun 30 2010, 07:04am hrs
Italian scooter maker Piaggio wants to retain the originality of Vespa in India. The Vespa LX 125 is expected to hit the market in the first quarter of 2012. Ravi Chopra, managing director of Piaggio Vehicles, said: Vespa is iconic like the Beatles. This time around, the company is not coming back to India through a partner but on its own. India is a significant destination for investment and offers immense opportunities. Since 2002, the scooter market has picked up pace here and has been growing at a CAGR of 13%, he said.

Piaggio will retain the originality of the Vespa, But the focus here would be on complete localisation of the vehicle, he said. The company already has a vendor sourcing group that would look at sourcing components for the vehicle and the process of localisation has already begun, he said.

The vendors would be approved by the parent company in Italy. Vespa scooters would be followed by other brands from the stable of the company. Once Vespa is established in the market, the company would keep adding other products, Chopra said.

The Indian market is currently dominated by Honda while Suzuki, TVS Motor, Hero Honda and Mahindra are other existing players. However, Vespa has been present in India for over 50 years and Chopra hopes that the magic would work again. The brand recall value is pretty strong, he said. Around 8.9 million two-wheelers were sold in 2009, making India the second-largest two-wheeler market globally.

Piaggio is considering a separate dealer network for Vespa. We are trying to create an infrastructure and network for due recognition of the brand. The objective would be to develop high class dealers and also set up boutiques to build awareness about the vehicle, he explained.

Work on dealerships should begin six months ahead of sales which should start by the middle of the next year, he said. Piaggio is also considering tapping its existing network of 800 touchpoints across the country to promote the vehicle. Some of the existing dealers would also be roped in to sell two wheelers as well.

Piaggio plans to invest a total of about 30 million euro in India in financial years 2010 and 2011 with a goal of achieving revenues of approximately 70 million euro in 2015. The companys facility in Baramati, near Pune will have an initial capacity of 150,000 units per annum. Capacity could be expanded as per market demand, Chopra said.

The company currently makes Ap three- and four-wheelers, Ape Truck, in its Baramati plant. Its engine plant should start production from April 2010.

Piaggio Vehicles India, a wholly owned subsidiary of the Italian two-wheeler maker, is gearing up to launch its cargo four-wheeler next month. The diesel half-ton vehicle is expected to compete against existing players such Mahindra & Mahindra and Bajaj Auto, which also have products in the intra-city segment.

The company also intends to focus more on exports of its recently launched passenger three-wheeler Ape City range. The three-seater Ape City range is available in petrol, LPG and CNG.