Modern Vespa

There are other forms of Advertising, Billboards placed in strategic locations (bus stops, bill boards overlooking clogged freeways), magazine/news paper ads, radio, the internet etc...

TVs not the only effective media.


Burger King bike give aways arent working.

Piaggio advertising discussion is interesting, but:

1) Scooter craze peaked with gas prices, lots of new riders came in! Does anyone remember the news reports about how well scooters were selling? This built even more demand as folks saw this and rationalized purchases.

2) Demand declined along with gas prices while inventories finally ramped up and continued to grow

3) Economy then tanked completely

4) lots of new scooter owners from #1 above dumped them as houses were lost along with jobs

5) Vespas, however, are perceived as quality scooters, whether new or used, so

6) Lots of smart people have been picking up great deals on very low mile used Vespas, Piaggios, etc as the economy has started to rebound, leaving dealers with lots of unsold inventory. This is a slow recovery especially for big ticket discretionary goods.


In my opinion the market has adjusted as has personal buying habits for millions of impacted families. Lucky for us the USA is a small market, and in itself will not kill Piaggio. They could, however, exit the market to focus on SE Asia which is the growth market of the world for everything now.....

Hi Eric.

...and I remember when "Made in Japan" meant "cheap, shoddy imitation of a fine American product".

In Houston I see a almost as many teen-20s on scooters as I do the 40+ crowd but I live near Rice University and not too far from the Heights and Montrose sections of town. Price of gas isn't a big issue in Houston but parking can be especially in the areas mentioned. The number of scooters seen has increased at least 100% each of the last 3-4 years in part for that reason.

My oldest kid is 17 and a senior in high school this year. He's been riding a Buddy 125cc since he was 15 since you can get a m/c license at 15 restricted to 250ccs or less. There are half a dozen kids at his school that ride scooters, 1 rides a Vespa and another a Stella. This year he could have gotten a parking permit ($100 per year) for a car (scoots & m/c have an area they can park in w/o a permit $0) but he decided to keep riding the Buddy.

We had decided to sell one of our scoots, either the Buddy or ET 4 so I asked which one he'd rather ride. My son chose the Buddy but then he's spent some of his own money making it too toned.

I see a lot of Buddys around town, price and reliablity are huge selling points along with the 2 year warranty.

For perspective...
1/2 of Bellagio Hotel and Casinos flower and landscape budget in 2000.

That's what you get when you dad is a L.E.O.

Just one more thought on Vespa sales issues...I live in a small town and
most people I've talked to have never heard of Vespa. Vespa certainly
has a "brand aware" problem. Granted, a large scale ad campaign cost a
fortune but I do believe it would work. Henry Rifles recently ran a series
of very clever ads that made me want to purchase one of their rifles. I'm
not a hunter, just a can plinker. The company was great to deal with and
makes a great product. What I see, is that Vespa is "preaching to the choir".
I believe Vespa owners are loyal and love their machines. MY recent
purchase of a new LX150 was based on the fact that I drove a second hand
P150 in the mid '60's. After all these years, I just had to have another.
We have to also realize that Honda is a household name that became
popular in the early 60's. Vespa on the other hand has only been available
for just about ten years in the US. (correct me if I'm wrong) They are also
fairly expensive which puts them in a class by themselves. They need a
marketing strategy that will establish their brand.

It's discouraging, but I don't think Piaggio would really consider leaving the market. The supply/demand dynamic for gas isn't getting any better, and gas prices are going to go back up sooner or later. I'm sure we'll see the same sort of hysteria when they do, and the discretionary market will theoretically return as the economy recovers. Piaggio have been in the game for a while, and they have the capital to make it work. I wouldn't expect any rash decisions.

I make a point of talking personally to as many dealers (not just the salespeople, but the owners) as I can. They all say the same thing: Piaggio pushes inventory on them. A lot. This is not new for 2009, this is something they've been doing in the US for years. And it's not at the end of the year's cycle, or even in the middle -- it's during the planning phase for the coming model year, before any bikes have even been built.

Honestly, you can't wave that away by calling it speculation. It's a well-established pattern with really obvious motives.

I believe they entered the USA market in 1950 or 1951 . In the early 1980's they pulled out of the USA market.

In the 1950s and 1960s Vespa was also sold through Sears and were called Allstates.

They then re-entered the USA market in 2001.


Almost everyone I meet, young or old, knows what a Vespa is. They might not know all about them but they do associate the name Vespa with scooter.

To me Vespa isn't another scooter. It is something different, it's a Vespa, in a class all it's own.

+1 you are dead on!

Where I disagree, Jess, is the "obviousness" of the motives, or stating without question what those motives are. Your logic is that Piaggio overschedules production in order to pad sales figures to dealers without regard to retail sales potential. My point was that someone over estimated the market. Could have been Piaggio, or Piaggio in concert with the overall dealer network. Once that overproduction took place, the only use for those vehicles was the N.A. market. Once that N.A. VIN is stamped on the chassis, it can only be a N.A. market scooter. Keeping retail inventory that "ages" hidden in a warehouse is not sound business. Sadly, the only place that offers visible inventory in this business is a dealer's floor. Unless we define that it is Piaggio's job to make being a dealer risk free, such is the nature of the game.

Now, if Piaggio had scheduled production without a plan for where these scooter would have gone, we would be attacking them for that. And, by definition, a "plan" means making decisions in advance. Since N.A. market scooter production has to be scheduled in advance, and since it has to take the arbitrary "model year" issue into account, for a small market such as the US, it's close to a crap shoot. Especially when the economy tanks.

If Piaggio makes too few US market machines, they are "indifferent" and if they make too many, they are "irresponsible". I'm not defending Piaggio, just questioning the twists in logic that ensure that Piaggio is always wrong. Especially when so many people have posted here that this or that failed dealer "had no business opening a dealership in the first place". As I have said numerous times, Vespas for the N.A. market must be made in discreet factory runs. Since manufacturing must be done in some minimum quantity, the margin for error is quite thin.

One problem dealers definitely don't have: lack of inventory on their floors. I know of more than one dealer that has to warehouse all their excess inventory, so it winds up in a warehouse somewhere, only the dealer is sometimes stuck paying flooring costs for it or having to rent additional space to store it.

Given the relatively small percentage of Piaggio's business comprising the Americas, why couldn't Piaggio warehouse some of that product instead of putting the financial burden on dealers who don't need it and can't sell it?

A few months ago a SoCal dealer just refused to take a shipment of scooters when it arrived at their shop. They couldn't take any more.

Piaggio's job isn't to make running a dealership risk free, but they should be vested in the long-term success of those businesses. Pushing a year or more worth of stock on them over the first half of '09 doesn't seem like they're acting in the best interest of their dealers.

Either way, the scoots are sitting somewhere and not selling.

For the time being, I doubt they're going to move a lot of new Vespas at full price regardless of what the company does. Due to dealer closures and repos from customers, there may be a number of discounted scooters on the market soon, which will simply continue to undercut new scooter sales and prices. I have a feeling the Chinese scooter market is the only one with any legs right now. Two LA-area Vespa shops have recently taken on Lance.

Piaggio's obvious motive is to keep production levels high....they are a manufacturing company, not a scooter company. They just happen to manufacture scooters.

Many manufacturers and distributors use tiered pricing to induce sales in bigger numbers. Making smaller purchases not as cost-competitive as larger quantities....often forcing the hand of the retailer. Many industries specialize in "Baker's dozens" to encourage sales of widgets in double digit increments. I don't know if Piaggio uses these programs, but it's very commonplace. Moving "tonnage" is a term used a lot in the channel.

If Piaggio, or any other manufacturer sold direct to the public here, without the middleman or "buffer" which is their distributors and dealer channel, they would be much more in touch with everything from their customer demographics which in turn would impact the inventory levels THEY would keep at the retail level, the advertising, faster reaction to broad service issues like failing exhaust gaskets, etc. were they in the trenches.

Manufacturing entities have to forecast production runs, but those runs have to meet certain baseline numbers to be viable from a manufacturing standpoint, ....these are production goals, not typically sales goals based on actual demand, but what seemed to make sense from a cost standpoint at the point of origin.

Piaggio's customers are it's dealers, and distributors. Not those of us here on MV and other "end-users". We are the customer's of our individual dealers....the dealer and it's staff are the one's we have the relationship with. They are in turn the customers of Piaggio and it's distributors like Vespa USA, with whom THEY have a relationship with.

Making your distributors commit to, and arrange for the appropriate letters of credit etc annually to help keep the "line" churning out widgets is a critical and often miscalculated, (either intentionally or not) step in the supply chain. If a manufacturer has built "X" amount of inventory, they gotta move it regardless....stuffing it into the warehouses of it's direct clients is the way. Once that happens, the problem is no longer theirs (at least in the short-term as we've seen lately here with failing dealers and inventory being returned)

Often in manufacturing, the sales goals (challenges) come after the fact, it's the tail wagging the dog...."how we gonna move all these widgets?..." is a very common dilemma to those charged with marketing to end-users.

There's no doubt that Piaggio, and many other manufacturers of EVERYTHING overproduce in advance of demand in order to keep people employeed, suppliers happy, make lease payments on equipment, etc.....in the case of big-ticket items like scooters, or business equipment etc., the ultimate burden to inventory and final-market the product is too often placed on the small businessperson down the street.

An initial purchase of 25 bikes is way above the required initial purchase of any other manufacturer/distributor.

If it happened occasionally, that would be a believable hypothesis. Since it happens every year, it's no longer as believable. But since gross incompetence is everywhere, it's still possible (if highly unlikely).

And I don't believe it for a minute, primarily because this push happens before the bikes are ever produced.

Any other annual requirements beyond that first 25? That's about $120k in retail value. Pretty meager for an annual sales target. Can a shop survive on 2 scooters per month? They can't here, and the cost of doing business is much lower than in the US.

Could it be that Piaggio is looking for a "serious" minimum investment before establishing a dealer? Like a commitment to a modest level of sales in the first year.

Just wondering.

Gordy-

I would buy this if the US market was more than a pimple on the backside of world PTW production. Piaggio Group sold some 201 thousand scooters in the first half of 2009, of which 14 thousand were in the Americas. That's 7% of world sales. Nice to have, but not a deal breaker nor the ultimate key to the company's success. In 2010, total scooter sales rose to 208 thousand units, while the Americas dropped to 1.5% of the total. Obviously, they are doing something right outside the Americas, and a 75% drop in Americas sales did not cripple them. Would have been nice to have had more, but not critical.

Harley is seeing overseas sales saving their bacon as well. Not as big a drop in US sales as Piaggio, but a much more established image and genre.

There is a hell of a lot more going on than Piaggio "greed" or ineptitude, and if you think the economy of the US is supportive of discretionary recreational vehicle sales, you don't pay attention to the rest of the population around you.

Correct me if I am wrong, Jess, but didn't Piaggio have to make a supplemental production run in 2008 for the US market? If so, then "every" is inaccurate.

As I said previously, the US market for Piaggio is far from mature (9 years) and suffered a major economic setback shortly after record fuel prices caused a short term fad increase in demand.

We're talking apples and oranges, Al.

I'm talking about pre-season planning.

I'm confused. If they had to make a supplemental run to meet demand, then the "pre-season plan" was low.

As to pre-season plan, how much lead time is involved from placing the order to producing and delivering the machines to the US and then to the dealers for a given model year. We're talking N.A. market only. No other market is bound to model years.

Any idea of what's the minimum production run?

3100 Units? Let's see, figure an average gross of $6000 per unit. That's, um, $18.6M gross. During the same time period, Modern Vespa members spent four times that much on computers, electricity and broadband to argue about scooters. Seriously, that's such a small gross that I don't see how PiaggioNA can afford the rent and utilities for their warehouse, much less pay their people or buy advertising. That's really a shame. It sounds to me like they don't need to bother pulling out of North America. North America has already pulled out on them.

It's actually much less than $6K/unit. That's 3100 units sent to dealers, not sold to customers. Piaggio won't gross that much per scooter.

I totally understand. I was just trying to get a sense of the gross income of their business. It's, like, two orders of magnitude smaller than I would have guessed. In corporate America, $18.6M is not even considered a large bonus for one executive! That's peanuts! And it's the size of Piaggio's NA gross? Holy cow! There's not much point arguing whether that burnt toast is toast, is there?

I bet I could spend $18.6M in 24 hours. If anyone doubts this, I'd gladly prove it. I'll just need $18.6 million. And Richard Pryor.

I remember seeing him do that money routine.

Seriously, let me say that I'm not gloating over PiaNA's misery. I'm horrified. It bodes ill for everybody to hear such depressingly low volume numbers. The tales of doom & despair hardly end with PiaggioNA, either. Suzuki brought NO motorcycles in the USA in 2010. Harley shed Buell and is now considering moving production somewhere other than the ancestral Milwaukee home, maybe even offshore. I don't know any detail, but I've heard rumors that something's up with a chain of scooter shops in the NA Southeast market. CarterSYM literally went up in flames. From what I can tell, the state of the PTW market is grim and getting worse instead of better. Do you know any good news that I haven't heard?

It appeared to be a suspicious arson. If I had a warehouse full of SYM's, I'd consider burning it, too. Some say we're in for a second economic slump, so we'll have more to talk about.

Yes - Piaggio's world wide revenues are up versus the first six month of last year. Some markets are down, some are up. Piaggio Group still leads in total units in the Italian market.

Meanwhile, in the US - well, there's a recession, if no one has noticed.

I have wondered if there were a way to get the America Public interested in quality scooters as a whole.

Show them being used as daily commuters, ride the to train station, shoppers, errand runners and other such items. Show the practical side of scoot and get some non-riders into the scooter stores. Get the dual sport and Harley rider to consider them for the more mundane and practical riding. Show how more practical the under seat is than their pannier-ed KTM/BMW or chromed out bagger HD. I know some of this is a niche market but scooters ARE a niche market.

I know you can sell just fuel economy but practicality, ease of use, and fuel economy seems like a better package.

If the general population could "see" practicality, perhaps it would expand the market. It took a couple of years for friends and neighbors where we lived in WA state to actually "see" that our scooters were not just fun toys, but reasonable and enjoyable transportation for a reasonable part of the year. So our two scooters, over 10 years, stimulated five or six people to give it a try. Two that we know of stuck with it.

Keep in mind that Harley spends some $20 million in marketing just to keep its sales relatively level. That's close to Piaggio's highest total sales figure in the Americas.

Since I started riding in 2004 I have had several friends an acquaintances try my scooter(s). I always stressed the practicality of my scooter and how it's a joy to commute on instead of taking the lousy public transportation. How good it is for frequently make short grocery trips or to pick up dinner etc.
I also stressed how much fun it is and it makes me more tolerable to deal with when I get home from work having just enjoyed a nice ride.

I think I am directly responsible for probably 10-15 scooter sales in the MA area.

I always told them to stay away from Chinese crap and told them to look at kymco, sym, genuine, piaggio, honda, yamaha etc..

Unfortunately none of the 10-15 scooters purchased were Piaggio. I guess the price point is a real deal breaker regardless of the economy.

People who see the practicality often choose the most practical scooter. That is how much money this will cost them to have a reliable scooter that suits their needs.
Only after they have gotten into scooters will the "practical rider" get into the newest nicest thing (often made by Piaggio) and spend the extra dough on it. Come on people, how many of you had a Jap scooter before you purchased your beloved Vespa??

At this point, all Vespas sold in Massachusetts -- including the LX50 -- need to get plates, insurance, etc. That's a big hassle and lots of extra cost. Regulations in California have caused many scooter rental places to shut down, and those fleet buyers must be pretty big business for scooter manufacturers, too.

What about other states? Are there enough states tightening regulations to the point that buying a scooter or owning a scooter rental business becomes less attractive?

Are you sure about a 50cc requiring plates and insurance?

It's been a while since I've checked but I know people who are riding their 50cc's w/o any plates and they have a mass RMV registration sticker.

Could you give specifics? What "regulations"?

Why is it so difficult for folks to accept that the US economy is in bad shape, scooters are discretionary purchases in the eyes of US consumers, and in a bad economy, discretionary buying takes a big hit.

At its peak, during the gasoline price bubble, scooter sales in the US rose to about 80,000 units/year - for ONE YEAR. That's nothing in a country of 300,000,000 people. That spike in sales was a gasoline price driven fad and at a time then the economy had not yet tanked. Since then, gas prices are down, unemployment is almost 10%, wages are stagnant, credit is tight and consumer spending is almost flat.

It's not regulations, or the manufacturers who are at fault. It's the lack of interested and/or able consumers.

Read the industry data. Here's some numbers from WebBikeWorld.com: U.S. PTW sales dropped dramatically in 2009, and continue to be very weak in 2010. This should be no surprise to MVers. It's been posted several times before.

Even the worst advertising works eventually. Having worked in the industry, I have seen good ads work and boring ones too. Personally I have never experienced a vespa or piaggio ad. Never. My exposure to the product has been as a result of my own research. I don't count AutoTrader as an ad campaign. But that is how I found my MP3 500. Dealer was 400 kms away and selling a 2009 model in June of 2010 for $5500 Canadian funds. 1.2 kilometers on the odometer,. That's 1.2! I left the next day.

Having said all of the above, personally I could not rationalize paying the full dealer markup of $11,000.

I read that in the context of operator licensing regualtions. In CA even a 49cc requires an M2 motorcycle endorsement....kinda tough to rent to people without that endorsement I suppose. Legally anyway.

Of course the scooter rental business falls under the "travel" umbrella, a sector also in crisis.

I believe there's more to the PTW business' downfall than the "just" economy....it could be a perfect storm for companies unless their marketing plans, price-points, dealer distribution, parts pipelines and any number of other go-to-market and business model factors are the best they can be. Holds true in most industries and only the strongest survive, but especially in times like these....time will tell if Piaggio USA is among the survivors in PTW biz here in the US.

I actually think Suzuki was smart to not import any new bikes here in 2010....take the year off, emphasize other aspects of their business, let the inventory levels dwindle if only a bit. Let their dealers relax by not having to worry about dumping last years bikes, with new ones headed their way like a freight train.

Some manufacturers are better positioned to weather it than others...time will tell if Piaggio USA has the "stuff" to get through these unprecedented times here in the US.

Piaggio will have no problem getting through a bad economy here, since the US is just a miniscule slice of their cupcake. US sales are not going to bring down Piaggio, and they're doing just fine in their bigger markets.

On the other hand, at some point Piaggio could decide that the US market is not worth the cost of doing business, and pack it in (again.)

I think that's what you're getting at.

Yup, referring to Vespa/Piaggio USA.

Those people are either breaking the law or riding out their grandfathered moped registration. I'm surprised you didn't hear about this. It's the Limited Use Vehicle law (LUV) which was put into effect recently.

To legally be registered as a moped in MA the vehicle can't JUST be under 50cc. It also can't mechanically exceed 30mph (and can't be ridden over 25). Recently the government here has caught onto the fact that Vespas and other motorscooters can and do get ridden over 30mph. So the enacted the LUV law to try to force people to register their scooters with plates and insurance (and in the process get a TON of parking ticket and speeding ticket revenue).

Most people, as you have noted, are still flying under the radar on this one, and 2009-2010 moped registrations are grandfathered in. This is the case with my ET2. It's still a moped until spring 2011, when I've gotta plate it and insure it.