Thursday, July 29, 2010

New age Vespa to be a lifestyle product meant for the elite |

New age Vespa to be a lifestyle product meant for the elite |
The iconic new age Vespa in its third coming would be positioned as a premiumly priced scooter, after fifteen years of non-existence on the Indian roads.

Piaggio India, a wholly owned subsidiary of Italy’s Piaggio SpA, will start building the Vespa LX 125 scooter starting early 2012 at a new greenfield factory in Baramati. In the first year, the new plant will be able to build over 100,000 Vespa scooters.

“A Vespa is a Vespa, its not a scooter..the Vespa (to be produced in India) will be designed for the Indian consumers’ tastes, something that offers them iconic value. It is a lifestyle product meant for the elite, for people who like to be distinctly known to possess something unique in nature,” chairman and managing director Piaggio India Ravi Chopra told Financial Chronicle.

Piaggio is working on ensuring that the gearless scooter suits the average short height of the Indian rider, so that their feet can reach the ground easily. It is also meant to suit women wearing floor-length Saris sitting at the rear seat of the scooter. Chopra said it would be too early to talk about the price of the LX 125.

The Vespa is made of a steel frame and sold in major continents Europe, North America, South America, Africa and Asia. “Vespa was first built in 1947 with a steel frame and the Indian one will be no different,” Chopra said when asked how would the company compete with other domestic scooters whose bodies are moulded from plastics and are hence less costly.

Chopra said the scooter market would witness a compounded annual growth rate (CAGR) of 13 per cent in the next three years, and about 2.5 million scooters would be required in the market by 2013. India’s scooter sales surged 22 per cent to 1.46 million units in 2009-10, according to SIAM.

Piaggio India already has a facility in Baramati in Maharashtra to manufacture 150,000 petrol and diesel engines for commercial vehicles as well as its Ape range of three and four-wheeled vehicles. Chopra declined to give investment required in the new factory.

The board of Piaggio Spa had in June said it would invest 30 million Euros at establishing a new factory for its Indian unit over the next two years.

Meanwhile, on Wednesday, IFC, a member of the World Bank Group said it has granted a loan worth 45 million Euros to allow Piaggio SpA to bring out a variety of new products with improved fuel efficiencies to the Indian market as well as expand its existing factory in Vietnam.

Vespa first entered India in the 1960s through a license manufacturing agreement with the Firodias. Firodias were a part of the Bajaj group at that time. The joint venture agreement expired in 1971 and Bajaj came out with its own Chetak scooter range.

The Vespa made a comeback in India again through a joint venture with LML in 1983 till 1999, when LML bought back Piaggio’s stake in the joint venture company.

Though Bajaj Auto has walked away from the scooter market, Hero Honda, Honda Motorcycle and Scooter India, TVS Motor Co. and Suzuki Motorcycle India all sell scooters.