Modern Vespa

Piaggio aims to grow in Vietnam, enter Brazil

BELLAGIO, Italy, March 26 (Reuters) - Italian scooter maker Piaggio said on Monday it wanted to expand in Asia by building plants in Vietnam and India as part of a three-year plan to be presented at its board meeting next month.

Piaggio Chief Executive Roberto Colaninno said the maker of the signature Vespa two-wheeler was also considering entering Brazil, a market where it has no presence.

"The markets that we plan to develop according to our business plan are Vietnam and Brazil," he told reporters.

Although Piaggio already sells some scooters in Vietnam, it was looking at building a plant and establishing a sales network in the country, he said.

Colaninno also planned to build a second plant in India by 2009-2010.

Faced with stagnant growth in their home markets, Piaggio and other scooter and motorcycle makers are expanding in Asian countries where demand is strongest.

hmmm...

I like that there's no Piaggio presence in brazil, which makes me wonder what brand *has* a scooter presence down there.

Aren't there a whole bunch of Rumi Formichino's and other oddscoots down in south america?

-Eric

Makes you wonder why they don't build a plant in the US. Most major automakers now have plants in the US. It seems it would only make sense to do the same with the Vespa/Piaggio - I suppose it's all about numbers though - If we build them here, then who will the guys in Italy build them for?

What I don't get is the part about stagnant growth since their 2006 profit almost doubled their 2005 profit due to demand in the US and India.

I wonder what models Piaggio envisage for those markets?
The demographic is for workhorse scoots rather than sporting models.
It will have to be four stroke engines now.
Can Piaggio be competitive against the flood of Chinese product?
What will LML say about that in India.
Anyway I want them to succeed and I hope they are Vespa rather than other Piaggio models for continuity of the style.

OK so now they open a plant in Veitnam, what happens to Viet-restos? Do they improve from the proximity of "mama-Piaggio?" Are they sent cease and desist letters? What do we call newly manufactured in Vietnam bikes: "The Viet-un-bodge?"

As for why a plant in Vietnam and India and not the US. Easy US production costs are still too high when compared to these other countries. Secondly, India is currently producing more engineers than the US (according to Thomas Friedman's book "The World Is Flat) so that may help future development of the product line.

I don't think having a Piaggio plant in Vietnam has any affect on restored Vespa. Piaggio does not regulate this kind of business. Most of the parts they use in restoration is hand made and built out of scratch, so they aren't about to use "genuine" vespa parts just because piaggio has a plant there. You wouldn't go and file a complaint with VW if you bought a badly restored Beetle would you?

I think this is great news for the fans of Vespa in Vietnam and SE Asia, because Vietnam has a 200% import tariff tax on all motor vehicles. My LX150 cost over $6000 and a new GTS125 is around $7000, and this is directly from a piaggio dealer!! If you buy one from an importer, try $8000 for a GTS125!! Trust me, the people here in Vietnam would rather ride on a Vespa then a Honda, but they can't afford it. Even in Vietnam, the name Vespa brings to mind "luxury and exquisite", sort of what BMW, Mercedes, Lexus brings to mind in the U.S. I still think all Vespa model will still be made in Italy, just the straight Piaggio models will be produce in Vietnam.

As for the "Made in Vietnam" thing, Isn't that what we said 20 years ago about "Made in Japan", 15 year ago "Made in Taiwan", 10 years ago "Made in Korea"?? Just because someone did not do enought research before they bought a poorly restored Vespa from a guy in an alley, should not leave a bitter taste. I've seen excellent samples of restored Vespa in Vietnam done by true Vespa enthusist. Intel is building a $3 billion cpu manufacturing facility in Vietnam, will you notice it when you fire up your PC?

Don't you suppose they will also use their factories in Vietnam and Brazil to supply the U.S. market? With the Euro high relative to the US$. how else can they compete in the future with Chinese and Indian made scooters.

Update

HANOI, June 25 (Reuters) - Italian scooter maker Piaggio SpA (PIA.MI) has begun production at its first plant in Vietnam, making inroads into one of the world's largest scooter markets.

Piaggio plans to sell up to 50,000 Vespas a year from its $30 million factory in the northern province of Vinh Phuc, near the capital Hanoi, the Vietnamese government said in a report...

...The scooter maker said it planned to sell its signature Vespa LX 125 at $3,450 in Vietnam, nearly triple the price of the Japanese Honda Dream, the country's most popular two-wheeler, but about 70 percent of the cost of made-in-Italy LX 125s already widely sold in Vietnam....



http://www.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUSHAN45866220090625

Why not manufacture some Vespas in the good old USA....

Wait, maybe a new GTS 300 would cost $500 less if made in India or Vietnam, and I can finally afford one.

Later...

"What do you mean I'm laid off, I just bought a new Vespa made in India."

SAme reason most manufacturers are moving away (as they are here). Western consumers want "cheap" but high wages - manufacturing moves to where there is "cheap" labour!