Piaggio to position Vespa as 'iconic, timelss'

Italian automaker, Piaggio plans to position the Vespa in India as a ‘lifestyle, iconic, timeless and ageless product' when the first 125cc gearless scooter is launched in April 2012. This is part of its effort to create an exclusive premium segment for the brand.

In his presentation in Milan on Wednesday, Mr Ravi Chopra, Chairman and Managing Director of Piaggio India, said it was important to sustain Vespa's brand image through an appropriate positioning and communication strategy. The key was to focus on its ‘heritage and unique values'.

Piaggio will produce the Vespa scooters at a new plant in Baramati, Maharashtra, which is already home to its commercial vehicle range. The company has earmarked initial production of 1,50,000 units annually which could include exports.

The Vespa will be targeted at 35 top Indian cities with exclusive dealer networks. Going forward, Mr Chopra said in his presentation that Piaggio would need to expand the scooter range while identifying customised products for India.

Honda is the clear leader in the gearless scooter segment with its Activa model head and shoulders over competition. The other prominent players are TVS Motor Company, Hero Honda and Suzuki with Yamaha expected to join the parade soon. Even though motorcycles account for a lion's share of India's two-wheeler production (estimated to close at 15 million units this fiscal), scooters have been growing briskly at over 20 per cent.

Ease of travel has become top priority among the country's young workforce which includes a growing number of women professionals. This makes gearless scooters the most viable option especially when public transport is scarce, uncomfortable and even unsafe.

Piaggio will count on Vespa's decades-long association with the country as an obvious recall advantage which could help it get off to a quick start. However, today's customer is a lot younger who is more familiar with home-grown and Japanese brands in the two-wheeler segment.

Piaggio's alliance with LML which ended in the late 1990s will only make some kind of a connect with the 30-plus age group which, in any case, is not the target customer base for a gearless scooter today. To that extent, the company will have to pull out all stops and ensure that its brand positioning is absolutely clear.
Asia-Pacific strategy

Scooters will also be a critical component of Piaggio's strategy for the Asia-Pacific region. Over the next three years, it has targeted eight countries as its growth levers. While Vietnam, Thailand, Malaysia, Korea, Indonesia and Taiwan are already part of the roadmap, Cambodia and the Philippines will join the list by 2014.

Production of bikes in Asia-Pacific is estimated to touch 19 million units over the next three years from the present level of 16.5 million units. Vietnam is expected to be the key hub for Piaggio which means components will be shipped out from here to other parts of the region.

It will be interesting to see if the Indian operations at Baramati play a role too given the top quality and cost-competitiveness of the local vendor base.