Modern Vespa

Paolo Timoni, the CEO of Piaggio Group USA resigned today. We have been told a successor is in place.

He was our only "boss" since we started in the motorcycle industry and he was a great boss. We wish him well in his future endeavors which certainly will be great ones.

SDG

that's why no one is returning calls..

huh...

Lets see,this could be a CEO simply wanting to go on to bigger and better things.

Or something bad is going to happen with Piaggio US such as a fold-up or the like.Interesting and a bit concerning.

Keep praying for higher gas prices to pull them out. If not, we are all screwed.

I'm wondering - was he pushed or did he get out while he could.

We are supposed to get an official word from Piaggio.

From what I can see it looks like a planned thing, no foulplay or weirdness.

no no no , we don't need higher gas prices . That will hurt us all in every aspect not just at the pumps.

I wouldn't be surprised Piaggio is planning on pulling out of North America to focus their efforts in Asia. The U.S and Canada combined probably generate less revenue for Piaggio than say Vietnam.

Yup, all that will do is reduce the pool of discretionary money (what of it there is) needed to buy scooters, motorcycles, and such. That money will go to fuel, and other prices of neccesities increased as a by-product of higher fuel costs.

Copyright laws, or should I say the lack of, usually keep most big companies with retail identities out of asian markets. Some of that is changing due to the rise in income and level of prosperity, but it's still a shark tank over there when it comes to intellectual properties.

Interesting news! I can't see Piaggio pulling out of the US since they went to the trouble of having most of the current models of Vespa, Scarabeo, Aprilia, and Piaggio scooters certified for use in the US. I can see them neglecting the market and nothing new coming over/being US certified (i.e. no BV300ie)...

I have a BV300 on the showroom floor!? Who told you that. They aren't pulling out, its business as usual according to all of my sources.

Best,
SDG

I'm sure they wouldn't announce a discontinuation of business operations here much in advance of turning off the lights, to anyone. Even (especially) to their dealer network. Just saying.

Let's hope they don't repeat their exit from this market in, what '82 again.

Well of course Matt. I certainly have reason to be hopeful, we all do.

Best,
SDG

! I would be there now if you weren't 1200 miles away

Sales of scooters in Vietnam and commercial vehicles in India pretty much account for all Piaggio Group growth over the past year. If not for these, company revenues would have dropped significantly; every other region and business unit saw declines. They've poured a lot into Asia and will (wisely) continue to do so. Vespa relaunches in India this year.

To put it in perspective, PiaggioAmericas accounted for less than 2% of company volume last year. Two wheel sales suffered in many regions, but none as much as the US. (Europe accounts for 61% of Piaggio's revenue; healthy but still a significant decrease over a year ago.) Because they're primarily luxuries and recreational vehicles in the US, the recession took a much bigger sales chunk here than in other parts of the world.

I think about this a lot. The Piaggio we all think of as a company that makes and sells scooters and motorcycles to the Americas and Europe is rapidly transforming into something else altogether.

The company may be looking for a change in strategy and leadership in N. America. Timoni is an economist with a background in finance and telecom. His first vehicle industry job was as Marketing & Sales Manager at Piaggio USA; he became CEO in 2005, a mere year later. There have definitely been some highs and lows, but I don't know how much he can be credited with or held accountable for. It's water under the bridge now.

Hopefully, the new leadership does more to tap into the passion and enthusiasm of the owner community and makes more efforts to build relationships with the Piaggio/Vespa faithful. We're a huge resource and in many ways the best salesmen and marketers they have.

I'm hoping someone has noticed piaggio has not grown enough under him and said its time for some new blood to get thing hoppin. Let toast to some new blood leadership that hopefully has a passion for the sport and vision to take them higher than they have ever been.

David, when is the owner of the most successful Piaggio dealership in the U.S. over the past few years moving back to New York to assume his new duties?

Focusing on the positive, I hope that Piaggio is streamlining their USA ops for the purpose of keeping the lights on as long as possible.

They are headed to new heights, in new markets and the US isn't one of them. Piaggio, as do most ptw manufacturers doing business here have numerous facts-of-life working against them. Those are facts that any CEO cannot really change. At best they can negotiate the minefields of business to aquire minimal damage.

The spate of failed dealerships has forced a buy-back of lots of inventory, and the few, loyal and embedded Piaggio customers (folks like us) are looking forward to new, improved Piaggio products. Meanwhile, they need to find homes for 2009, 2010, and well-travelled inventory (to dealers, then from dealers) which almost surely means NEW to Piaggio customers, buying older inventory.

Thats a tall order for anyone, and to-date they have been ineffective at any massive campaign to do so, especially since the great recession.

A lot of it is timing. If a poor CEO comes in during boom times, he looks like a genius regardless of his input. A brilliant CEO cannot swim against the tide of tight credit, lack of consumer confidence, a cultural dis-association with ptws as anything MORE than a toy, and of course price-point sensitivity (competiton)

Piaggio simply cannot continue to do things as they have been here, and hope to remain viable.

The dealer body has to take responsibility for this also, corporate can not be the only one to blame for stagnation. I figure there are 280 Vespa dealers in the USA. If each dealer worked extra hard vs. waiting for people to swing their door corporate would be well rewarded.

If each dealer in the USA could find a way to sell an extra 2 Vespas a month (thats not asking for much) that would be an additional 560 scooters a month or 6720 Vespas a year and trust me that would turn the whole thing around.

2 a month..........am I proposing something too much here?

I'm told too small a percentage of the dealer body is selling too large a percentage of the scooters in the USA, the balance is way off nationally.

Some dealers have last summers promotions on their websites or haven't updated them or marketed their product in nearly a year. A lot of the problem lays right there and hopefully this improves so Vespa can thrive in this Country as they should.

SDG

Well said Matt. I knew you would be in on this thread, glad you are.

SDG

Thanks Dave, and I appreciate you letting us know about today's developments....they are obviously important to us, you, other dealers, and Piaggio.

I agree 100% with your synopsis above (wait, did I REALLY just say that? ) about the dealers. And as usual it's the old 80-20 rule and thats not going to help Piaggio in this instance.

I'll be the party pooper here, but how was he a great boss?
I cannot think of any concrete way in which he has furthered Piaggio's position in the US.
All the worthwhile 'marketing' has been done by shops like VespaSO, seemingly independantly of Piaggio USA.

I say this as an 'outsider' but I think that is relevant. I've been a moto enthusiast for over twenty years, and only recently have I fully embraced the scooter fold. And that was almost accidentally, by stumbling into a shop like Dave's. Not by any Piaggio campaign that made me aware of the brand.
And this is from someone who avidly reads moto magazines, checks out websites etc. If Piaggio was this invisible to me, imagine how poorly they must have been attracting new blood into the powered two wheel world.

Don't blame the economy on this one. Moto companies like Ducati, Triumph, BMW and even Victory have been expanding in the same climate.

Desmo-

Not sure you can equate the Scooter market with the Motorcycle market in the US, nor compare US PTW trends with the rest of the world. Take Italy, for example. Scooters outsell Cycles by about 2 1/2 to one, and this does not include <50cc models.



In the US, cycles have generally outsold scooters by more than 10 to 1.

Using that old marketing adage, "Sell the sizzle, not the steak", we are talking about two radically different perceived images between Scooters and Cycles, and thus two totally different "Sizzles", no less types of meat.

The questions a company like Piaggio has to answer is what need does a scooter satisfy in the US market, how great is that need, how can that need be stimulated, how can we position our product to meet that need and so on.

So much is written here about the need for Piaggio to do more advertizing and promotion. Think about the cost involved in a national advertizing campaign. Exactly what would you suggest Piaggio promote? What needs would they offer their products as solutions to? In Europe and Asia, they simply have to influence a choice between brands and models about purchases that are, in fact, inevitable. In the US, they first have to stimulate a perceived need for a scooter, and then compete on a brand, model, price basis.

US customers on MV are already sold. The market potential for people with our "wants and needs" is known, and it's not big. Piaggio either needs to make more people think like us, or find a way to position their products to appeal to people who don't think like us. Change the population or change the perceived image/utility of the product. Either one is a pretty significant undertaking.

And, I would also note that the non-US channels of distribution have one advantage over the US. There is not the built in obsolescence handicap of "Model Year". Thus, product does not "age" as dramatically in the hands of dealers (or Piaggio) as it does in the US. For all intents and purposes, 2009 product in the US will "compete" with 2011 product, at least in terms of price point. In a market as small and volatile as the US scooter market, that's a handicap when sales are slow. Where scooters are more of a necessity, not quite the case.

I just wanted to chime in... I would think this this has more to do with culture, perceived safety and reliability.

I don't think Piaggio will pull out of any market soon - Certainly not the USA.

In my opinion, one of Piaggio's problems is that it is not the household name. Vespa is the household name... not Piaggio.

On the other hand, it is possible that Piaggio does not want a bigger piece of the market share. Triumph made those same type decisions in the past, which in the minds of some, is the reason that HD has a greater market share today.

End of ramble

@voneschenbach - Don't let the 1200 miles put you off. It sounds like a nice trip - Fly down and ride the coastal roads back!

Sad to say, but part of the problem may still be too many dealers, dealers in the wrong locations, dealers often competing with one another for survival.

There are as many or more Vespa dealers in some states as Mercedes dealers. I'm not saying the two are equivalent, but it's indicative of levels of affluence and demand for luxury vehicles. Missouri, for instance, has seven Mercedes dealers and 10 Vespa dealers. Idaho has two Mercedes and six Vespa.

They need to take a good, hard look at the boutique model. I know many of the original ones are still around, including the original one, but that's likely because the original ones were all in the best markets and locations. In many mid-sized markets such as Austin, San Antonio, San Diego, etc., boutiques have closed and shops selling other lines (such as Motorsport) have taken over Vespa sales for the area. 280 dealers may be too many; expecting boutiques to succeed in smaller cities and cramming multiple shops into the larger ones when sales are doing anything but booming has proven a poor strategy. Vespa is promoting Vespanomics (still). They are currently offering their products as a solution to having two cars.

They don't need to do a national ad campaign to have effective advertising. They could offer dealers co-op money and provide them with good, agency-made creative. They could target certain markets and outlets. Digital billboards in LA. Radio in some areas. They could advertise on cable and target specific demographics, including the older, more well-heeled buyers that comprise a large percentage of owners these days. They could do more digital advertising. Their digital marketing could be much more effective.

None of this will do much good without the right messaging, though. As I've said in the past, I think trying to sell Vespas on the basis of practicality and savings only highlights their shortcomings when compared to other makes with lower MSRP, cost of ownership and maintenance, higher fuel efficiency, etc. In the US, people who want Vespas and can afford them buy Vespas. People who want a practical and cost-cutting scooter to supplement their transportation needs get something more utilitarian. They don't need to sell the entire country on the concept of scootering, they just need to sell Vespas to those with the budget and who fall into key demos/classes of likely buyers. Vespas are sold on want more than need in the US.

I'd almost think they could have more success doing the opposite of your suggestion. How about a campaign with, "Do you want a scooter, or do you want a Vespa?"

eric-

The basic issue is return on advertising dollar, and the local/regional approaches you suggest are still costly in comparison to the potential market that is really out there. The general population does not perceive a scooter or Vespa as anything other than a recreational purchase. Second, one has to be licensed to engage in this recreation, another barrier to entry. We can market the product to ourselves as much as we want, but expanding the market means changing the behaviors and perceptions of others. Preaching to the choir does not convert anyone.

Figuring advertising and promotion budgets of 12% (which would include, from an accounting standpoint, discounts to spur sales) means about $60 available in the price of one $5,000 scooter. A $6,000 sales promotion would need to generate 100 in unit sales at $5,000 per unit to be supported. There is simply a limit on how much promotion is worthwhile in the US market. What "need/want" are you going to offer to satisfy, and how many people will have that "need/want"?

I don't think you are, but for the love of humanity someone or some company has got to find a way to promote and sell scooters in North America that isn't somewhat elitist like Vespa or hip like Genuine or dorky like the Honda of the 80's. I mean, these are mainstream transportation devices for the masses. And they are not expensive in the bigger scheme of things. Not even Vespa. But it's like moderator ericalm said, they are "luxuries" for many or "recreational." Why is this when what they are primarily is economical, practical, and fun? I mean is actually riding a well built modern scooter an easygoing, fun in the sun experience? No, it's not. It's totally exciting and somewhat bad ass. I don't care if it's on a Vespa or a China scooter, nothing is relaxing or recreational about heading down the road on 10 and 12 inch wheels at 60mph!

I don't know dude, you sell them and are open while others have closed up shop. How do YOU propose to sell two more scooters a month?

Scooters are cheap, fun, and exciting. Heck, we can get into the gear, and accessories, fashion, "lifestyle" and expense of it all, but we can also just grab a helmet and top case and ride. I think this is what people need to realize.

My scooters still get called "cute" far too often. Freakin' cute! Why do they have this image? Nothing is cute about my scooters and they kick ass on any cage on the road!

Let's get America scootin'!

You start though, lol

It sounds as if you're arguing against yourself, Al. If "In the US, they first have to stimulate a perceived need for a scooter, and then compete on a brand, model, price basis" but advertising is too expensive to be worth the effort, then the only other option is Vespa resigning itself to the fact that it will not grow in the US aside from the ups and downs of the scooter market in general. Is that what you're suggesting?

Honda had great success with national print and TV advertising in the '80s, so it's not that ads can't work for the scooter market or that it erodes the margins. They established the brand, the image and the product. They connected with consumers. They had a good product. There were other reasons for Honda's success, but the ads were a huge part of it.

The scooter market has changed, but so has advertising. Now there are many media for advertising and marketing which are not only cheaper (relatively) but also more effective at targeting potential buyers. I'm not talking about marketing to the faithful. There's too much of that already. Few of Vespa's promotions generate any kind of awareness outside of the world of Vespa or scooters. There are very few efforts to reach buyers outside that sphere at all. Small, inexpensive campaigns could yield big returns.

And can we please get some TV ads, Piaggio? PLEASE we are begging you!

I mean if you want to sell scooters and make money in America, you have to spend some. I am pretty sure this is a profitable company overall. So maybe a Super Bowl commercial, some TV commercials in some markets? Spend a little money to make some money.

Americans are an image driven lot. We like to see things, they need to make sense to us. We need to see why we should ride scooters, and how cool they are. Let's introduce a line of accessories and scooters just for the U.S. Let's put "Vespa America" or "American Vespa" right there on the scooter, with a little American flag next to it. And not in the shape of a mod bullseye!

Let's SHOW people riding with their groceries, their kids, and out on a date. Let's shiow the fun and the freedom! Americans love freedom more then cappuccino and Corrazo jackets, god dammit!

We need to sell the dream, the image, and the practicality of said dream and image. That's how Harely Davidson sells motorcycles to dentists, and it's how Vespa and others can sell scooters to the masses.

Let's go, The United States of Piaggio!

Am I asking too much?

Don't answer that


edit: oops i posted this before ericalms reply but i must insist, as i am up in arms over this at 2:30am and about to ride!

Ye-- Nevermind.

As much as most of us would love to see a massive shift in the way most Americans perceive scootering, it's not coming anytime soon and I doubt any scooter company can singlehandedly spearhead that change.

From my perspective, it sure looks like Vespa would benefit from a shift in marketing strategy. What makes brands like Porsche, Harley-Davidson, Apple, Rolex, thrive? I suggest that it isn't that they offer cheaper more practical alternatives to thier competitors, or even better products.
Marketing scooters as a cheap alternative mode of transportation might sell some $2000 bikes, but that's not Vespa's goal. Vespa needs to be percieved as a thing to be desired - fashionable, prestigious, extravagant, and marketed outside the scooter community to enthusiasts of other stripes. Magazines like Golf Digest, Yachting, Cigar Afficianado, Automobile, and plenty others fall into the hands of people with passion for expensive things. I'm suggesting that Vespa stop marketing as though their competition is a Kymco or a used Mazda. There's nothing wrong with being perceived as an expensive toy.

Wade-

US Porche sales are indeed up. They might just sell 24,000 cars in the US this year. Harley Davidson is basically stable in a US market that prefers motorcycles to Scooters by a margin of 10 to 1.

eric- my point is that a major shift in consumers' perceived wants/needs is required for scooters to begin to take off in sales. Honda scooters in the 80's did not sell more than 5 or 6,000 units a year. They were simply the only automatic in town, and a novelty at the time. I was there, and had been riding for over 20 years. Without their motorcycle infrastructure, their scooters would have done poorly. I doubt Piaggio can break scooters out the niche market they represent in the US without major outside help.

Semi-hijack.....

Are the BV300's the U.S. isgetting the NEW style? The one with the 20 spoke wheels and motorcycle style gas cap? A picture would be much appreciated!

Bob

My BF is totally middle american and he believes the difficulty lies in price.

He also thinks of scooters as a expensive toy despite the fact that my BV500 can keep up with his motorcycle.

He thinks scooters, compared to motorcycles, are priced too high. Like many Americans, he does not recognize the "style, panache, or lifestyle" afforded with a scooter. He is middle class and he sees a two wheeled vehicle, with low cc's going for the same price as a used 750cc bike.

The Toy Mentality is difficult to over come, for me it is the heart of the issue.

A scooter is consider a necessary vehicle in the rest of the world, simply because there, it is not considered a toy. It is considered necessary transportation.

Americans are selective about their "toys". I have worked my entire life in order to purchase a house and a car. I have two tiny dogs and a scooter. That is it. And I wouldn't have even purchased the scooter if a uncle had not passed away and left me a little bit of money.

The scooter was the first item I have ever bought myself that did not have anything to do with food or shelter. And I had to wait until I was 45 to be able to afford it. That in itself = Toy.

I stumbled on scooters by chance. After taking a MSF course with a co-worker who washed out. He was told about scooters by his partner and he told me.

There was no scooter offered by the MSF course. I had never seen a print ad or a television ad, except way back in the 80's. Motorcycles are the ONLY two wheel transport in America. Even tho The Road/Freedom, belongs to everyone.

I have never understood the lack of scooter marketing here in the states. Where are the commercials, the print ads and radio commercial dealer tie ins?

You have to maintain a presence if you want to make a difference. You can stay and keep chipping away at the market. That is at least something. If you move one rock at a time, eventually you will move the mountain. Persistence is the key, not quick returns.

I hope Piaggio will not abandon America and I hope that the new CEO will infuse their approach with imagination and persistence, because that is what it will take to win over a John Q. Public like my BF.

But me, ahh Piaggio BV500, you had me at Hello.

But a Vespa is not really expensive, nor is it a toy. I mean, the average Joe drives a $20,000 automobile, which is the average price of an average car. Just how "expensive" is a $6,000 scooter going to seem to the folks down at the Yacht club? It's not even expensive to the average wage earner tbh. They just need to be shown a reason to buy.

It's got to be less about pretense and more about, i don't know, something else? I mean if I made six figures+ and had loads of disposable income the last thing I would desire is a $6000 "toy" with 12in wheels the mods of England used to get around on back in the day.

Maybe that's why a lot of those Yacht and Cigar people are indeed the ones who buy not Vespa scooters but $15,000 Harley's and $20,000 Ducati's. Now, those are expensive toys. Those impress people. A scooter, not so much.

So scooters? Well, somewhere between the $2000 scooter you mention and a $6,000 Vespa lies a whole lot of them. But I am afraid none are considered exclusive. And to try to make them so, or continue to try to make them so, just adds to the fussy pretense already perceived by many.

imo.

I hate to throw in the towel here, but maybe no one wants to ride scooters, anyway. It would be a shame for Vespa to leave America, but it could happen, I suppose. We would still have scooters, however. So, too bad for Vespa, I guess. But I will scoot with or without Piaggio.

Last edited by TheWasp on Sat, 05 Mar 2011 13:31:19 +0000; edited 1 time

As an old advertising copywriter, I have to say, that is one award-winning theme line!

Best thread ever. I talk to people all the time here in south jersey that don't even know what (a) Vespa is! And there's a dealership less than 5 miles away! Here's what I would do if I had a dealership in south jersey: get the HECK out of pleasantville. The dealership here is right in the middle of the most "ghetto" place is south jersey. I went there when I was first seriously considering buying a vespa and the guy in there wasn't the least bit excited about selling me what I had the cash in my bank account to buy. So I went to Philly where the sales people there actually cared. I promise I'll make a point relevant to this thread out of all this. I have some friends who are about to buy vespas and the only reason they wouldn't buy one before is because they didn't realize how accesable and affordable they are. I think if even a small marketing campaign were to take place here (even just ONE billboard) they would see an increase in sales. And move out of the ghetto (literally shootings every day less than a block away from te dealership...).