
Piaggio's new commuter scooter will have a flavour mix of Italy and India
Piaggio Vehicles
explores getting a foothold in India's commuter scooter segment,
Diego Graffi
is categorical about what the product ought to be like.
'The new offering should always be combined with the key pillars of Piaggio globally in the two-wheeler space. These are design, lifestyle and heritage. It should be something that gives the customer the flavour of having a product that is designed as per Italian standards but customised for Indian applications,' the Chairman and Managing Director told ET Auto in a recent interview.
At present, the company's scooter portfolio consists of the iconic
Vespa
which is priced comfortably at over ₹1.2 lakh and is part of the niche premium segment. For the more voluminous commuter category which Piaggio is looking at seriously, the product will need to be two-thirds the price in order to attract customers.
'In order to scale up volumes, we have to invest in a space that has the potential to deliver and this is the commuting segment of scooters where volumes are six million units annually. But obviously, to compete in this category, we need to have the right kind of product that customers are seeking,' said Graffi.
Pricing challenge
Beyond this, it is important to be competitive in terms of price and this is 'definitely' a challenge. 'However, I think we have all the skills, capabilities and experience to do this,' he added. For a company that has tasted success in the mass three-wheeler segment, it is hopeful that the same can be replicated in the scooter space where affordability will play a big role.
Removing one wheel and developing a scooter is not a big deal.Diego Graffi
'So we already have that in our DNA in India. So removing one wheel and developing a scooter is not a big deal. Of course, it is a challenge but it is not impossible,' reiterated Graffi.
Even while plans are still at the conceptualising phase, things are proceeding 'very fast'. In the process, there will be an all-new brand emerging from the Piaggio stable in India. The CMD ruled out extension of the Vespa brand to this new commuter scooter reiterating, 'No, no, no. Vespa is Vespa. You cannot touch it. This product will be altogether another segment and another customer base.'
On the retail side, there is every likelihood of using the current two-wheeler network that caters to Vespa at least in Tier 1 cities but more dealers need to be roped in for smaller towns where the market for mass scooters truly resides in.
New geography
'The dealer network has to be focused to sell this kind of product especially in rural, Tier 2 and 3 regions. This product is more a commuter — I don't want to use the word mass — and we have to explore areas where we are not present at all. So it is all together a new geography that we are talking about,' elaborated Graffi.
The company's long experience with three-wheelers in India means that there is a fair degree of market intelligence when it comes to smaller cities and towns. However, a scooter is an all-new animal and will require specialised skills in marketing and after-sales service to make things work well.
Luckily, we have a good vendor base already that we can use for the new scooter.Diego Graffi
Likewise, the pricing of the product needs to hit the sweet spot and this is where Piaggio's suppliers will have a key role to play. 'Luckily, we have a good vendor base already that we can use for the new scooter,' he said. Plans are already underway to send shipments overseas to Africa, Turkey and many other markets across the globe.
When this new product becomes a reality, it will mark the wheel coming full circle for Piaggio in India. Old-timers will recall the heady days of the 1980s and '90s when the
Italian automaker
had an alliance with the Kanpur-based LML where its mass scooters were the closest rival models to Bajaj Auto's range of the Chetak, Super etc.
India comeback story
When LML and Piaggio split eventually, the latter decided to get into the cargo three-wheeler space as part of its second innings for India. It was a masterstroke because this was a larger unexplored arena where the chance of growth were stronger. Piaggio soon became a familiar brand here and then gradually stepped into the more glamorous space of scooters and motorcycles with Vespa and Aprilia.
Also read:Piaggio plans larger scooter portfolio for India beyond Vespa
The group's global CEO, Michele Colaninno has been a keen advocate of the India growth story and has been pushing for a bigger role here in terms of new products and making the country a global hub for vehicles and components.
Graffi said the CEO was very 'forward thinking' and saw India as a great opportunity. 'He has a particular appreciation for India and always perceives that we could do better looking at the potential here,' he added.
Colaninno was in India a little over three months ago where he got around to to see the market. He visits the country at least every year and each time he sees it, there is something new in terms of technology or the changing face of vehicles on the road that grabs his eye. From his point of view, India remains a fast growing market that hold tremendous potential for companies like Piaggio.
Rebooting scooter template
It was a little over a year ago when Colaninno had spoken of redefining the company's scooter template in India by way of an entry into the commuter space. 'The mistake we have done in the past is more on the scooter side, where we have not been able to face the competition of low-cost vehicles,' he had said.
While making clear that the company would continue to be in the high/premium end with Vespa and Aprilia models, he said this perhaps was not enough in terms of the overall scooter strategy. 'But at the same time, I think we have to be ready and able, more able than ready to fill the gap, let's say, with the competition that we have on scooters,' said Colaninno.
There was a specific reference to competitors who have had a good run in the mass scooter space where numbers continue to grow at a brisk pace. 'If you take the Honda Activa, if you take TVS, they produce millions and millions of vehicles,' he pointed out.
We will take the right decisions to be ready and enter the big volume market there. Not with the Vespa, not with the bike.Michele Colaninno
The
Piaggio Group CEO
was, however quick to add that such a comparison would not be apt. 'You cannot compare us with Honda, obviously, which has been there in the two-wheeler market for years in India. But I think that we will take the right decisions to be ready and enter the big volume market there. Not with the Vespa, not with the bike.'
New strategy for India
It is keeping this objective in mind that Piaggio believes the time has come to take a serious relook at its scooter business model for India. 'I think that we have to put in place a new strategy for the two-wheeler market in India. It is true that it is moving towards a high level of consumer business, but some mistakes have been done over there, especially on two-wheels,' said Colaninno.
The Italian automaker is clear that this does not mean that the focus on premium models will be diluted. As he made clear, the company is satisfied with the response to the Aprilia RS 457 medium displacement bike that was launched at a price of over ₹4 lakh.
'The actual management — the new management team — is just people that we have decided to put in place on the R&D. But that does not mean that we will exit the premium market, because India is growing on GDP per capita and it will grow slowly, but we are ready to catch the growth. Numbers are not millions, but with the RS 457, we are very satisfied,' said Colaninno.

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