Reference Auto

Nowadays, scooters have lost their charm, but at such a moment, Italian two-wheeler major Piaggio is planning to ride into the Indian market with its iconic Vespa and this time with an “aspirational” scooter, which may witness a bumpy ride in India.

The Italian company, which is one of the leading two-wheeler makers in Europe, is not new to India and already has past experience in the country’s market with tie-ups with LML and Bajaj.

The company has priced its scooter above Rs 66,500, which is even higher than many motorcycles.

Scooters are a dying product and the first to realize this was Bajaj Auto managing director Rajiv Bajaj.

The pricing of the Vespa is much higher than products of competitors like Suzuki and Honda.

For instance, Honda sells its popular 110 cc Activa scooter model for Rs 47,945 while Suzuki’s 125 cc Access is priced at Rs 47,774. In contrast, Vespa is almost Rs 20,000 steeper.

In a price-sensitive market like India, products like motorcycles and scooters are usually brought by the vast middle class. This segment is a highly price-sensitive one and the big question is will a scooter priced such steeply be welcomed by the public?

“We plan to create a premium luxury segment in scooters. We want to fulfill needs of the brand conscious and fashion conscious Indians, who want to make a lifestyle statement by acquiring distinctive and exclusive products,” Piaggio India chairman and managing director Ravi Chopra said.

The Italian company, which will roll out more two-wheelers including motorcycles, wants to position the Vespa for cities and will set up 50 dealerships across 35 cities.

“We are making the Vespa at our factory in Baramati, Maharashtra, which has a capacity of 1.5 lakh units. Production will be doubled to around three lakh units by the middle of next year, which will take our two-wheeler investments to over euro 50 million,” Chopra said.

Piaggio has a scooter and motorcycle model line-up ranging between 50 cc and 1,400 cc and its brands include Aprilia, Derbi, Gilera and Moto Guzzi.

“The idea with the Vespa is to create an aspirational brand and not just play on the price point,” Chopra added.

So, with such ambitious plans of ramping up dealership network, Piaggio could water it down with such high pricing since not many are likely to make a beeline for premium scooters (in contrast to premium bikes).

Scooter sales in India surged 25% to 25 lakh units in the year till March, trumping a 12% rise in motorcycle sales. Scooters are more of a semi-urban and rural products than an urban one.

The plan of creating an aspirational segment in scooters may be a flawed one as no one really (especially in towns) would want to opt for an expensive scooter, and if Piaggio doesn’t realize this, it may witness a bumpy ride in India.