Can premium Vespa swing it with the new-gen?

Mr Ravi Chopra is delighted with the market response to the recently-launched Vespa.

“So far, there have been 2,000 bookings and around 30,000 enquiries. Over 3,000 Vespas are already on the roads,” the Chairman and Managing Director of Piaggio’s India operations declares.

The Italian automaker is already creating capacity for 150,000 Vespas at its Baramati plant in Maharashtra this year before doubling it to 300,000 units by end-2013 (Piaggio follows a calendar accounting year).

Mr Chopra is absolutely confident that this can be achieved even while the sceptics insist that the numbers will be slow in coming.

After all, they reason, the 125cc Vespa comes with an on-road price tag of Rs 70,000 which makes it Rs 15,000 costlier that India’s top-selling scooter, the Honda Activa.

Other manufacturers also did not give the Vespa too much of a chance saying that it was overpriced. Clearly, the market thinks quite differently.

Sustaining the image

“What is heartening is that there is price acceptability for the Vespa and its customers feel a tremendous pride of ownership. It is an iconic product and I am delighted and excited about its prospects,” Mr Chopra said.

The Piaggio India chief had made a presentation at an analyst and investor meeting in Milan last December where he spoke of the need to position the Vespa as a ‘lifestyle, iconic, timeless and ageless product'.

According to him, it was important to sustain the brand image through an appropriate communications strategy. The key was to focus on its ‘heritage and unique values'.

Piaggio had planned 50 exclusive Vespa dealerships across India’s 35 top metros but the response shows that this may not be enough. Plans are now underway to double the number of outlets while adding another 25 cities on the Vespa roadmap.

Demand from Tier-2 regions has been as aggressive which is hardly surprising given the buying pattern witnessed in recent times for expensive cars and SUVs.

Mr Chopra is also pleased that the Vespa’s premium positioning has had a strong connect with customers who are kicked about owning a scooter that is distinctly more upmarket and stylish.

“It was never our intention to compete in the mass market. We had to be in a niche of our own and the strategy is working just fine,” he said.

Interestingly, for an earlier generation of users, the Vespa was a mode of transport for the great Indian middle class.

Relaunched avatar

But now, in its relaunched avatar, the Vespa has positioned it as an upmarket brand. It has struck a chord with young men and women with even a handful of people in their mid-40s accounting for the growing customer base.

To old timers, the Vespa is immediately synonymous with the 1953 silver screen classic Roman Holiday , where Gregory Peck and Audrey Hepburn paint the Italian capital red on their trusty scooter.

Nearly six decades have passed since the romance of the movie held a generation in thrall, but Vespa expects to weave its magic again with youngsters in India, most of whom may not have watched Roman Holiday .

In an earlier interview to this paper, Mr Chopra had said, “Ours is not a scooter; it is a Vespa and a way of life. The idea is to awaken a sleeping potential consumer who does not have such a product. He wants to be part of an exclusive community and make a statement.”

Number game

Naturally, the Vespa’s projected numbers of 300,000 units annually by end-2013 are modest compared to market leader, Honda which produces as many Activas in less than three months. Other established manufacturers such as TVS, Suzuki, Hero and Mahindra also have big plans with Yamaha set to join the parade soon.

There is no telling if Piaggio will be tempted to join the numbers game in the coming years and think of more affordable variants. After all, the brand will have been better established by then and customers would be more inclined to owning a Vespa.

Incidentally, Mr Chopra had said in the Milan presentation that, going forward, Piaggio would need to expand the scooter range while identifying customised products for India.

For the moment, though, everyone involved with the project is pleased as punch about the brand’s comeback in India after a break of over a decade.

Prior to that, the Italian company was in a joint venture with LML to manufacture the Vespa at the latter’s Kanpur plant.

This was the period when geared scooters were ruling the roost till the motorcycle revolution happened and they were knocked off their pedestal almost overnight. By then, Piaggio had fallen out with LML and decided to focus on the mini-commercial vehicle segment in the second part of its India innings.

Vespa’s gameplan

The Vespa will be the sole European brand in a product segment where the Japanese (largely Honda) dominate along with two other Indian companies.

It is assured of a customer base, despite its premium positioning, thanks to the rapid growth in gearless scooters. They are now the best bet for young professionals since public transport is unreliable, crowded and unsafe.

Asia-pacific focus

Beyond India, scooters will be an important part of Piaggio's gameplan for the Asia-Pacific region where it has targeted eight countries over the next three years. Vietnam, Thailand, Malaysia, Korea, Indonesia and Taiwan are already part of the Piaggio map with Cambodia and the Philippines set to add to the list by 2014.

Vietnam is expected to be the key hub for the Italian automaker and components will be shipped out from here to other parts of Asia-Pacific. There is a strong possibility of India playing a much bigger global role too given the quality levels and cost-competitiveness of its vendor base.

This could just be the beginning of a bigger Vespa story.

> gmurali@thehindu.co.in

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