Whenever V.K. Bhardwaj, a retired army officer, rides his new Vespa scooter, a rush of adrenaline takes him back to his youth.
New Delhi-based Bhardwaj, 67, who bought a Vespa LX125 in May, said he “started his life” with it and the scooter has been his fantasy. He first bought one in 1962 and still has its number plate clearly etched in his memory.
When Piaggio Vehicles Pvt. Ltd announced last year that it plans to reintroduce the iconic two-wheelers in India, Bhardwaj was among the first to book one.
More than 40 years ago, Piaggio licensed the production of Vespa scooters to Bajaj Auto Ltd. The joint venture ended in 1971. The company formed a partnership with LML Ltd in 1983 to make and sell scooters in India. It exited the venture in 1999 when LML acquired Piaggio’s stake.
In its new avatar, the local unit of the Italian auto maker has positioned the scooter as a premium, lifestyle product aimed at women, college students and the upwardly mobile. That perception went through a sea change in just two months. “Besides the young and trendy, surprisingly, there is a renewed rush of booking and inquiries from senior citizens and people in their early 50s coming to our showrooms to ride their favourite scooter that was an integral part of their lives in younger days,” said Ravi Chopra, chairman and managing director of Piaggio Vehicles Pvt. Ltd, India.
Even octogenarians are taking a Vespa ride.
“We have an 80-year-old customer who bought a yellow-coloured Vespa with a matching yellow coloured helmet,” said Vivek Bengani, director at Delhi-Based Bhawani Motors, a Vespa dealer. “He is truly young at heart.”
Senior citizens comprise a category that Piaggio Vehicles India had almost discounted when it launched Vespa in April. There are more than 5,200 Vespas on Indian roads, according to Chopra.
Priced at Rs.66,661 (ex-showroom, Pune), the Vespa is dearer by at least Rs.20,000 compared with rival automatic scooter brands available in the market. But Vespa’s premium pricing does not appear to deter buyers. Shrestha Malhotra, 21, a Mumbai-based aircraft pilot, bought the scooter because of its head-turning effect. “I have been stopped a zillion times by curious onlookers to enquire about the scooter. Their interest vanishes when they hear that the on-road price for it in Mumbai is Rs.75,000,” he chortles.
While the niche positioning seems to be working for now, the company may face hurdles in India’s price-sensitive market, experts say.
“They are creating an imagery and building romance around the brand to attract the target audience,” said Habeeb Nizamudin, chief growth officer at media agency, Lodestar Universal. Though the scooter market is crowded, there is an opportunity gap with no firm having used this price and brand positioning, he said.
However, he’s not sure if it’s a sustainable strategy.
“This kind of pricing is difficult to sustain,” said an executive from a market research firm, who spoke on condition that neither he nor his firm be named. According to him, in any product category there is a group of novelty seekers who will buy anything new. The actual test begins once the model is a little old.
“Considering that the pricing is way off the mark, it’s difficult for Piaggio to make a mark in the competitive scooter market, which has been expanding at 20% per annum,” he said. It’s not clear whether the auto maker wants to be seen as a niche player or mass one. “It does not fit in either.”
But buyers of Vespa have a different take.
Malhotra, who is impressed by the retro Italian design, said unlike a Honda Activa, the Vespa will always be an exclusive brand in India. If it’s the cute retro look and the vintage badging that attracts those in their 20s, it’s the sense of nostalgia that rekindles the desire to own the Vespa once again for those past their prime.
Meanwhile, Piaggio, which sells the scooter through 50 Vespa stores, plans to add 30 more by September and step up its presence in smaller cities, said Piaggio’s Chopra.
The company produces the scooters at its facility in Baramati, Maharashtra, which can produce 150,000 units a year. Plans are afoot to double capacity in a year’s time.
Piaggio has invested €35 million (around Rs.243 crore) in the facility and plans to put in an additional €20 million to augment capacity.
