Italian three-wheeler (3W) giant Piaggio has slipped from the second spot in the domestic three-wheeler market, with its share falling to 6.2% in the first half (April-September) of the current fiscal from 7.3% during the same period a year ago. The company sold 38,441 units, down from 43,371, even as overall three-wheeler sales rose 4% to 618,230, according to Vahan data.
Sector analysts attribute Piaggio’s decline to its weak performance in the CNG segment and sluggish pace in adapting to the EV transition.
Though Piaggio was among the first legacy players to enter the electric three-wheeler space in 2019, its EV market share remains modest at 1.7%, compared to 12.1% for Mahindra and 10.2% for Bajaj. While both Mahindra and Bajaj recorded year-on-year growth in EV sales, Piaggio’s volumes fell 22.4% to 6,643 units from 8,565 in the same period last year.
Piaggio did not reply to Fe’s queries till the time of going to the press as to why it lost market share and what steps the company is taking to regain the same. Data from the company’s parent, Piaggio Group, indicates that the firm is focused on maintaining a high-margin strategy with a continued emphasis on ICE vehicles.
During the first half investor call, Piaggio Group CEO Michele Colaninno acknowledged that EVs remain low-margin vehicles and said the company was “not pushing too much” in this segment. He noted that customer demand for e-three-wheelers is largely driven by government subsidies, and reduction in these incentives lead to decline in the market. “It’s a low-margin business, so we don’t have to push too much on launching EVs, given that also the thermic ones are good enough for our business in India,” Colaninno said.
EV penetration in the three-wheeler segment is higher than passenger vehicles and two-wheelers, at over 62%, up from 56% a year ago. Mahindra, which overtook Piaggio in sales, has successfully capitalised on this transition, with around 90% of its three-wheeler sales coming from EVs, compared with just 17% for Piaggio.