Modern Vespa

Dear Shane,



Thank you for your email and for the opportunity to share a quick update regarding Piaggio Group presence in Canada. As we announced on November 10th, see attached press release at the bottom of this email, we are very committed to the Canadian market and are planning for a long term presence in the market. Following the termination of our distribution agreement with Canadian Scooter Corp., we are currently in the process of setting up new business operations to provide the highest level of service to our Canadian customers. We are very happy with our progress so far. Currently we are already supporting Canadian retailers of Piaggio Group products by fulfilling their warranty claims for standard manufacturer warranty and their spare parts orders. We anticipate that by end of February we will have a dealer network in place with executed dealer agreements with Piaggio Group Americas and will be able to resume normal business operations.



The majority of Canadian retailers involved in Piaggio Group products, have already reached out to us and have warmly welcomed our direct entrance in the Canadian market. I believe Canadian customers of Piaggio Group products, and Vespa in particular, have no reason to be concerned: they own products of the highest quality, that retain a high second hand value, and that will continue to benefit from a high-level of customer service. With regard to your specific questions, following are some preliminary observation:

- Extended warranty: this is a product that was developed and retailed by CSC (see form attached we received from a Canadian retailer). At this point CSC is still an ongoing business and we have no reasons to doubt that they will continue to meet their legal obligations. In any case we will continue to monitor the situation.

- Small dealers: we believe small and large dealers are very important for a sound distribution network. Despite the challenging economic situation, most dealers are coping reasonably well and we have observe only a few cases of dealers forced to close their operations because of financial reasons. We anticipate that by end of February we will have a network of authorized dealers in Canada appointed by PGA that will include both small and large dealers. In selecting the new network of authorized dealers we will consider all applications from dealers that have been retailing Piaggio Group products in Canada in the past.

- Spare parts: since last week we have resume shipments of spare parts for all dealers in good standing that are placing orders with PGA. Service levels to Canadian customers should resume very quickly.

- Buying a Vespa: I believe that today as in the past buying a Vespa is a great decision for any consumer interested in scooters and I do not see any reason why a purchase decision should be postponed. All standard manufacturer warranties will be honored by PGA and service levels will be insured.

- Toronto show: unfortunately this year we will not be able to participate as we have decided to focus our resources on other priorities, mainly supporting dealers and customers.



I hope this address your questions. If you need further information, please do not hesitate to contact me. During this transition of business operations it is very important for us to keep in touch with the owners of our products and to address all their needs and concerns. Piaggio Group is here to stay in Canada and is committed to continue to provide a better and better service to its Canadian customers.



Best regards



Paolo Timoni

President and CEO

Piaggio Group Americas Inc.

The recent events have definitely been interesting for everyone involved.

Based on our understanding - any existing Canadian dealer that is in good standings and has been approved by PGA will have there vehicles and warranties covered by the manufacturer - meaning PGA! Any dealer (or distributor/importer) that has not been approved will not have the authorization to offer warranty coverage thru PGA - meaning you are purchasing a vehicle without warranty!

Extended warranties were the responsibility of Vespa Canada NOT Piaggio Group Americas; therefore we have decided, along with several other dealerships, to only honour extended warranties that were supplied by us (we will most likely not be reimbursed for this work so this is the reason for this decision).

The effective date was November 6, 2009 for the transition of ownership from CSC back to PGA. Using this as the effective date - many of the Ontario dealers have elected to only honour vehicle warranties that were sold by authorized Piaggio Group Americas dealers. Any warranties on vehicles sold by dealers outside of this "authorized group" - will not be honoured unless prior approval is received by PGA (in writing!).

Step back and take a moment to understand one thing...when a deal is too good - maybe it just is! Make sure that your money is working for you because if you spend a little more you will get twice its value in service!