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For Vespa, mantra is slow and steady


Two-wheeler runs short of expectations, but company says it is stepping up efforts to increase sales

Italian two-wheeler maker Piaggio & C. SpA’s results for the first three quarters of this calendar year had a brief, but significant, reference to its iconic scooter in India. “Vespa run rate falls short of our expectations; we are stepping up efforts to increase sales,” the company said in its November presentation.

Ravi Chopra, Chairman and Managing Director of Piaggio’s Indian operations, would rather look at the bigger picture. “We are moving in the right direction and sales will step up. It is important to be patient,” he told Business Line over the phone from Pune.

Chopra reiterated that for a premium scooter like the Vespa, volumes are not top priority. “On the other hand, we are creating a segment which we can own. The brand is getting accepted and people are talking about it.” Clearly, the Vespa is not in the same mass product category as the Activa, Pleasure, Jupiter or Ray. With a higher price tag, its sales would be confined to a specific category of buyers keen on showing off this scooter. As a result, the numbers will be slow in coming which is precisely what Piaggio had anticipated. Earlier this year, the company had slashed Vespa prices by nearly Rs 6,000, which meant the ex-showroom price would begin at around Rs 60,000. According to Piaggio, this was a result of better “operational productivity in the plant and efficiency through systems”. Chopra had then said this price slash would not impact the Vespa’s premium positioning in the market.

The 125cc scooter was launched in April 2012, followed by the high-end VX version in July this year. Sales of the Vespa duo are reportedly averaging 5,000 units a month. The capacity at the Baramati plant near Pune is 1.5 lakh units a year and it was widely believed that it would be doubled by the end of this year. But then, market conditions have been difficult for automakers for a while now. It is this depressed sentiment, coupled with the Vespa’s higher price tag, that puts the sales numbers in perspective. Yet Chopra is not deterred. “People are noticing its distinctiveness and positioning strategy,” he said. Piaggio is also keen on spreading the network to other parts of India in course of time.

For the moment, men take up over two-thirds of the buyer base for the Vespa, but this could change.

Women prefer options like the TVS Scooty and the Hero Pleasure as well as the Honda Activa and the Yamaha Ray, which meet their style quotient as well as budgets. The Vespa is still in a premium league and its owners want to be associated with a scooter that is distinctly European and more upmarket.

Even before its India launch, Piaggio was clear about the positioning of the Vespa as a ‘lifestyle, iconic, timeless and ageless product'. The idea was to sustain the brand image through an appropriate positioning and communication strategy focusing on its heritage and unique values.

In an earlier interview to Business Line , Chopra had said: “Ours is not a scooter; it’s a Vespa and a way of life. The idea is to awaken a sleeping potential consumer who does not have such a product.”

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