Introduction

Vespa (Italian pronunciation: [vspa]) is an Italian brand of scooter manufactured by Piaggio. The name means wasp in Italian. The Vespa has evolved from a single model motor scooter manufactured in 1946 by Piaggio & Co. S.p.A. of Pontedera, Italyto a full line of scooters and one of seven companies today owned by Piaggio. From their inception, Vespa scooters have been known for their painted, pressed steel unibody which combines a complete cowling for the engine (enclosing the engine mechanism and concealing dirt or grease), a flat floorboard (providing foot protection), and a prominent front fairing (providing wind protection) into a structural unit.

History
Post World War II Italy, in light of its agreement to cessation of war activities with the Allies, had its aircraft industry severely restricted in both capability and capacity.

Piaggio emerged from the conflict with its Pontedera fighter plane plant demolished by bombing. Italy's crippled economy and the disastrous state of the roads did not assist in the re-development of the automobile markets. Enrico Piaggio, the son of Piaggio's founder Rinaldo Piaggio, decided to leave the aeronautical field in order to address Italy's urgent need for a modern and affordable mode of transportation for the masses.

Concept
The inspiration for the design of the Vespa dates back to Pre-World War II Cushman scooters made in Nebraska, USA. These olive green scooters were in Italy in large numbers, ordered originally by Washington as field transport for the Paratroops and Marines. The US military had used them to get around Nazi defense tactics of destroying roads and bridges in the Dolomites (a section of the Alps) and the Austrian border areas.

Design
In 1944, Piaggio engineers Renzo Spolti and Vittorio Casini designed a motorcycle with bodywork fully enclosing the drivetrain and forming a tall splash guard at the front. In addition to the bodywork, the design included handlebar-mounted controls, forced air cooling, wheels of small diameter, and a tall central section that had to be straddled. Officially known as the MP5 ("Moto Piaggio no. 5"), the prototype was nicknamed "Paperino" (either 'duckling' or Donald Duck in Italian).

Enrico Piaggio was displeased with the MP5, especially the tall central section. He contracted aeronautical engineer Corradino D'Ascanio, to redesign the scooter. D'Ascanio, who had earlier been consulted by Ferdinando Innocenti about scooter design and manufacture, made it immediately known that he hated motorcycles, believing them to be bulky, dirty, and unreliable.
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D'Ascanio's MP6 prototype had its engine mounted beside the rear wheel. The wheel was driven directly from the transmission, eliminating the drive chain and the oil and dirt associated with it. The prototype had a unit spar frame with stress-bearing steel outer panels. These changes allowed the MP6 to have a step-through design without a centre section like that of the MP5 Paperino. The MP6 design also included a single sided front suspension, interchangeable front and rear wheels mounted on stub axles, and a spare wheel. Other features of the MP6 were similar to those on the Paperino, including the handlebar-mounted controls and the enclosed bodywork with the tall front splash guard. Upon seeing the MP6 for the first time Enrico Piaggio exclaimed: "Sembra una vespa!" ("It resembles a wasp!") Piaggio effectively named his new scooter on the spot. Vespa is both Latin and Italian for waspderived from the vehicle's body shape: the thicker rear part connected to the front part by a narrow waist, and the steering rod resembled antennae.

MP6

Sales and development

Original Vespa with attached sidecar

Piaggio sold some 2,500 Vespas in 1947, over 10,000 in 1948, 20,000 in 1949, and over 60,000 in 1950.[6] The biggest sales promo ever was Hollywood. In 1952, Audrey Hepburn side-saddled Gregory Peck's Vespa in the feature film Roman Holiday for a ride through Rome, resulting in over 100,000 sales. In 1956, John Wayne dismounted his horse in favor of the twowheeler to originally get between takes on set as well as Marlon Brando, Dean Martin, and the entertainer Abbe Lane had become Vespa owners. William Wyler filmed Ben Hur in Rome in 1959, allowing Charlton Heston to abandon horse and chariot between takes to take a spin on the Vespa. Vespa clubs popped up throughout Europe, and by 1952, worldwide Vespa Club membership had surpassed 50,000. By the mid-1950s, Vespas were being manufactured under licence in Germany, the United Kingdom, France, Belgium and Spain; in the 1960s, production was started in India, Brazil and Indonesia. By 1956, one million had been sold, then two million by 1960. By the 1960s, the Vespaoriginally conceived as a utility vehiclehad come to symbolize freedom and imagination, and resulted in further sales boosts: four million by 1970, and ten million by the late 1980s.

Improvements were made to the original design and new models were introduced. The 1948 Vespa 125 had rear suspension and a bigger engine. The headlamp was moved up to the handlebars in 1953, and had more engine power and a restyled rear fairing. A cheaper spartan version was also available. One of the best-loved models was the Vespa 150 GS introduced in 1955 with a 150 cc engine, a long saddle, and the faired handlebar-headlamp unit. Then came the 50 cc of 1963, and in 1968 Vespa 125 Primavera became one of the most durable of all.

T5 Millennium from the PX series

Vespas came in two sizes, referred to as "largeframe" and "smallframe". The smallframe scooters came in 50 cc, 90 cc, 100 cc, and 125 cc versions, all using an engine derived from the 50 cc model of 1963, and the largeframe scooters in 125 cc, 150 cc, 160 cc, 180 cc, and 200 cc displacements using engines derived from the redesigned 125 cc engine from the late 1950s.

The largeframe Vespa evolved into the PX range in the late 1970s and was produced in 125, 150 and 200 cc versions until July 2007. The smallframe evolved into the PK range in the early 1980s, although some vintage-styled smallframes were produced for the Japanese market as late as the mid-1990s.

Design icon

Modified Vespa as popular in the mods/skinhead culture.

In recent years, many urban commuters have purchased new or restored Vespas. A shortage of available parking for automobiles in large urban areas and the Vespa's low running costs are two reasons for the increase in Vespa (and other scooter) popularity. The cultural use of the scooter as a recreational vehicle with a sub-cultural following in the USA/Canada and parts of Europe & Japan has also contributed to the rise in Vespa ownership. In contrast, the Vespa is considered a utilitarian vehicle for hauling products and sometimes up to 5 family members in much of Asia and Mexico

This resurgence in interest in vintage motor scooters has also spawned a scooter restoration industry, with many restored Vespas being exported from Thailand, Vietnam and Indonesia to the rest of the world

There is a Piaggio Museum & Gift Shop adjacent to the plant in central Pontedera, near Pisa, Tuscany. The permanent exhibition includes those items which toured venues such as the Guggenheim in New York and the Centre Pompidou in Paris. Also on display is a model personally customised by Salvador Dal in 1962.
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Global markets
Europe
Vespa's largest market by all measures globally is still Italy, but as a result of the mod subculture that developed in the 1960s, the United Kingdom is still Vespa's second largest global marketand at one point in the 1960s, its largest. The appeal of the Vespa to the style-conscious mods was the weather protection. Their counterparts, the rockers rode classic British motorcycles such as Triumph Bonneville and BSAs, and needed to wear leathers against the elements. Mods would modify their Vespas, adding lights, mascots, accessories, various racks and crash bars. A new lifestyle evolved in the UK, with thousands attending scooter rallies.

The dominance of the Vespa declined through the 1970s, as small car ownership increased and cheap and reliable commuter bikes like the Honda Super Cub hit sales. Despite the introduction of the more modern 'P' range in the 1970s, the lack of development cost Vespa, and like other markets, the sales fell off drastically in the economic boom of the 1980s. Then Vespa introduced the trendy automatic ET2, London introduced the congestion charge andpartly with celebrity chef Jamie Oliver's indirect help from his BBC2 series sales suddenly leapt.

North America

A Vespa Boutique in San Francisco

Much as Vespa had used the Cushman Army scooter as inspiration for its original design, Vespa in turn made scooters for Sears and Cushman after World War II.

Imported by Morton Colby of Colby General Tire Company, 662 E. Fordham Road, Bronx, New York, the Sears models were 3- and 4-speed 125 cc Vespas rebadged as Sears Allstate Cruiseaires. Innocenti also distributed their Lambretta brand via Montgomery Ward's catalogue during this post-World War II period. These were the premier brands of scooters, bringing premium pricing to many, including farmers, whose link to the outside world was via purchases made in these catalogues. Cushman sold rebadged Vespa scooters as Cushmans, but many Cushman dealers refused to market a "foreign" machine. However, collectors prize the Cushman Vespa because it is relatively rare.

Bankruptcy of Vespa's American importer due to two expensive product-liability lawsuits, increased competition from Japanese manufacturers, and certain states' passing so-called "green laws" caused a withdrawal from the US market in late 1981.

During 1981-2001, despite an absence of United States domestic sales, Vespas continued to have a core group of enthusiasts who kept vintage scooters on the road by rebuilding, restoring, and adding performance-enhancing engine parts as the stock parts would wear out.

Vespa returned to the US market in 2001 with a new, more modern style ET series, in 50 cc two and four stroke, and 150 cc four-stroke. According to the Motorcycle Industry Council, U.S. scooter sales increased fivefold over six years, swelling from 12,000 units in 1997 to 69,000 units in 2002. Vespa sales in the U.S. increased 27 percent between 2001 and 2002. The 65 "Vespa Boutiques" scattered throughout the U.S. gave scooterists a place
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to buy, service, and customize Vespa scooters, and outfit themselves in everything from Vespa watches and helmets to Vespa jackets, T-shirts, and sunglasses. Vespa restarted its American sales effort, opening its first boutique on Ventura Boulevard in Sherman Oaks, Calif.

In light of vastly-increasing US sales, Vespa developed the GT, offered as a 200 cc fourstroke and a 125 cc variant in Europe. In 2004 Vespa reintroduced a modernized PX 150 to the US. In the fall of 2005, Piaggio offered their largest-selling Vespa scooter ever, the

250 cc-engined GTS250, available in Europe with ABS. In 2009, Vespa released the GTS 300 which can cruise at 6570 mph (105110 km/h).

Production outside Italy

Bangkok: Vespa in business mode

Vespa scooters were sold beyond Europe and North America. When expanding into these markets it was common for Vespa to partner with, or license certain models to, existing manufacturers.

India
Piaggio first licensed the production of Vespa scooters in India to Bajaj Auto in the 1960s. In 1971, Piaggio's license was not renewed as a part of Indira Gandhi's privatization programs. After the collaboration ended, Bajaj continued to produce scooters based on the Vespa design, namely the Chetak.

Another Vespa partner in India was that of LML Motors. Beginning as a joint-venture with Piaggio in 1983, LML, in addition to being a large parts supplier for Piaggio, produced the P-Series scooters for the Indian market. In 1999, after protracted dispute with Piaggio, LML bought back Piaggio's stake in the company and the partnership ceased. LML continues to produce (and also exports) the P-Series variant known as the Stella in the U.S. market and by other names in different markets.

In the 2012 Auto Expo held in New Delhi, the iconic Vespa re-entered the Indian Market. Piaggio unveiled its range of scooters at the Expo. This became the first such venture of Piaggio in India without a local partner.

Indonesia
Danmotor Vespa Indonesia (DMVI) was a joint venture between Indonesian interests and the East Asiatic Company, which was based in Denmark. Between 1972 and 2001 it produced Vespas under licence for the Indonesian market. In 1976 approximately 40,000
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units were produced giving DMVI the third biggest share of the Indonesian scooter market. Government tax incentives allowed these scooters to be exported to Thailand at less than the domestic market price, so that they would be economically competitive. DMVI only built 90 and 150cc models. From 1972 onwards the company was located at a purpose-built factory in Pulo Gadung. This was greatly expanded in 1977 to also manufacture subcomponents, following a government decree that a higher domestically-built proportion of these should be used. Sub-components were also bought from other Indonesian manufacturers after their quality had been approved by Piaggio.

Soviet Union
Between 1956 and 1966 an unauthorised, reverse-engineered version of the Vespa was built and sold in the USSR by Vyatka. This was withdrawn after protests by Piaggio.

Taiwan
Vespa has had various partnerships and presence in Taiwan. In 1965 Taiwan Vespa Co. Ltd was licensed for Vespa scooter production. From 1972 to 1982 Vespa entered into a collaboration with manufacturer PGO. In 1978 Vespa entered into a collaboration with TGB, which to some extent, continues to this day (namely with CVT transmission production).

Vespa models
There have been 34 different versions of the Vespa. Today five series are in production: the classic manual transmission PX and the modern CVT transmission S, LX, GT, and GTS.

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1969 Vespa Rally 180

1963 VBB Standard 150

1962 Vespa 150 GL

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VintageVespa-AutoExpo-Delhi Historic
Paperino the original prototype made in 1945 at Biella Vespa 150 TAP A Vespa modified by the French military that incorporated an antitank weapon. VNC Super 125 VBC Super 150 VBA 150 VB1 150 VBB 150 125 GT V9A VNA VNB 125 Vespa U - U is for utilitaria (English - economic). 1953 model with a price of 110,000 Italian Lira (about US$175), 7,000 were produced GS 150 GS 160 SS 180 Vespa 90 (3 spd) Vespa 50 (3 spd) SS50 (4 spd) SS90 (4 spd) - 90 SS Super Sprint 150 GL 90 Racer 125 TS
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100 Sport 125 GTR VLB 150 Sprint VLB 150 Sprint Veloce (Vespa Sprint) 180 Super Sport Rally 180 Rally 200 125 Nuova (VMA-1T) - Prelude to Primavera Primavera 125 also ET3 (3 port version) PK 50 PK 50 XL PK 50 Roma (Automatic) 50 S 50 Special 50 Special Elestart 50 Sprinter / 50 SR (D) 50 Special Revival (Limited to 3,000 Italy-only numbered units, released in 1991) COSA 1 - 125 cc, 150 cc, 200 cc COSA 2 - 125 cc, 150 cc, 200 cc P 80 / P 80 E (France) P 80 X / PX 80 E (France) PK 80 S / Elestart PK 80 S Automatica / Elestart PK 100 S / Elestart PK 100 S Automatica PK 100 XL PK 125 XL / Elestart PK 125 S PK 125 E PK 125 Automatica (automatic transmission) P 125 X PX 125 E/Electronic P 200 E
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PX 200 E FL PX 200 Serie Speciale (Limited to 400 UK-only numbered units) T5 / Elestart (5 port engine 125 cc P series)

T5 Classic (5 port engine 125 cc P series) Recent

ET2 50 - 2-stroke ET4 50 - 4-stroke ET4 125 (Euro Model) ET4 150 (Euro Model) ET4 150 (US model) ET8 150 (Eastern model) GT 125 (Granturismo 125) GT 200 (Granturismo 200) GTS 250ie GTS 250 Super - Only briefly sold in the US where the 278cc engine as used in the 300Super had not yet been approved for use. Quickly replaced by the GTS 300 Super. PX 125 PX 150 (reintroduced to US and Canadian Markets in 2004) PX 200

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Current

2008 Vespa LX150 LX 50 LX 125 LX 150 LXV 50 (60th anniversary variant of LX50) LXV 125 (60th anniversary variant of LX125) GT 60 250 cc Limited Edition. 999 produced worldwide in unique colours and each one receiving a commemorative badge, personalized with the owners initials. Features the front-fender-mounted headlight, shared only with the GTV 250. GTS 125 GTS 250ie GTS 250 i.e. abs GTS 300 (2010) GTS 300 Super (2008) GTV 125 (60th anniversary variant of GTS 125) GT60 (60th anniversary limited run variant of GTS 250) Features the fender mounted headlight as atribute to the original Vespas. GTV 250 Standard model based on the GTS250ie. Physically similar to the GT60, but available in a choice of colours. PX 30 125 (A limited edition, only 1000 produced to celebrate the 30 years of the P range) New PX 2011 150 (and later also 125); not just a limited edition: in 2011 the PX series restarted to be produced in Italy after a 3 years absence because of the EU restriction about Euro III engines emissions not followed. In occasion of the 150th anniversary of Italian 16

union, Piaggio has proposed this special version, with a re-designed saddle but with the same "Vespa experience". S 50 and S 125 new model 2007, introduced at Milan Motorshow November 2006 S 150 (2008) Zafferano 50 cc and 125 cc (A limited edition, only 200 produced)

Swot Analysis
Identifying strengths, weaknesses, opportunities and threats to assist in understanding and decision-making
The SWOT (strengths, weaknesses, opportunities, threats) analysis technique can be utilised in various ways to assist in understanding and as an input to decision-making.

The BABOK (Business Analysis Body of Knowledge) Guide v2.0 suggests the following uses of the SWOT technique :

When assessing capability gaps for an organisation, SWOT analysis can be utilised to identify how current capabilities and limitations (Strengths and Weaknesses) match up against the influencing factors (Opportunities and Threats). The SWOT analysis will assist in the identification of gaps in the capability of the organisation.

When determining the solution approach this technique provides a useful method of comparing possible approaches. Solutions which, for the organisation, maximise the strengths, take advantage of the opportunities, address the weaknesses and avoid the threats can be identified and compared.

When developing the business case the output of the SWOT analysis will demonstrate how the recommended solution will help the organisation maximise their strengths and minimise their weaknesses.

When assessing the organisations readiness for the new solution, SWOT analysis can be used to assess strategies developed to respond to identified issues.
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How to Use the Tool:

The first step of SWOT analysis is to establish the objective of the analysis. This must be unambiguous and agreed by those partaking in the analysis.

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An example of an objective when using SWOT analysis as part of a software development project could be Reduce the time to process an invoice from 5 days to 1 day. You might use SWOT analysis to determine how well the recommended solution meets this objective.

In this case the SWOTs are : Strengths attributes of the recommended solution that are helpful to achieving this objective Weaknesses attributes of the recommended solution that are harmful to achieving this objective Opportunities external conditions that are helpful to achieving this objective Threats external conditions that are harmful to achieving this objective.

The clear definition of an objective ensures that people contributing to the analysis, and those seeing the finished SWOT analysis, properly understand the purpose of the SWOT analysis and its implications.

Identify the contributors to the SWOT analysis. Advise each participant of the objectives of the SWOT analysis and advise them of any background preparation to be carried out.

Invite the contributors to a workshop session where each section of the grid will be completed. The workshop will be organised and facilitated by the business analyst. It is important that the atmosphere of the workshop is conducive to the free flow of information and allows the participants to say what they feel to be appropriate.

The content of the lists developed for each of the four SWOT sections will vary depending on the objective of the SWOT looking for capability gaps of the organisation requires consideration of different factors than determining the SWOT for a recommended solution.

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Strengths
List the strengths. The strengths to be included should be those positive attributes internal to the organisation, business unit or solution, that are helpful to achieving the objective. Strengths may be any internal factor that leads to success.

Consider the following:

Capabilities

Competitive advantages

Unique selling points

Advantages of proposition

Resources, assets, people

Experience, knowledge, data

Processes, systems, information technology, communications

Financial reserves, likely returns

Reach, distribution, awareness

Innovative aspects

Location

Price, value, quality

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Accreditations, ceriticifications, qualifications

Philosophy and values

Customer satisfaction

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Weaknesses
List the weaknesses. Weaknesses are also internal and, therefore, within your control, and are the factors that the organisation, business unit or solution does poorly or not at all. These could include lack of expertise, limited resources, lack of access to skills or technology or inferior service offerings.

These are the areas you need to consider for enhancement to strengthen the organisation, business unit or solution.

Consider the following:

Gaps in capabilities

Lack of competitive strength

Reputation, presence and reach

Financials

Vulnerabilities

Timescale, deadlines and pressures

Cashflow, start-up cash drain

Continuity, supply chain robustness

Effects on core activities, distraction

Reliability of data, plan predictability

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Morale, commitment, leadership

Accreditations, ceriticifications, qualifications

Processes, systems, information technology, communications

Customer dis-satisfaction

Opportunities
Opportunities are external factors that would be helpful in achieving the objective. Consider the following: Market developments

Competitors' vulnerabilities

Industry or lifestyle trends

Technology development and innovation

Global influences

New markets, vertical, horizontal

Niche target markets

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Geographical, export, import

Tactics: eg, surprise, major contracts

Business and product development

Information and research

Partnerships, agencies, distribution

Volumes, production, economies

Seasonal, weather, fashion influences

Political changes

Threats
Threats are those negative factors than can negatively impact the organisation, business unit or solution. Threats are external factors and you have no control over them. There would be benefit in developing contingency plans to deal with threats in the event that they occur.

Consider the following:

Political effects

Legislative effects

Environmental effects

IT developments
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Competitor intentions various

Negative media coverage

A shift in consumer behaviour

Market demand

New technologies, services, ideas

Vital contracts and partners

Sustaining internal capabilities

Obstacles faced

Insurmountable weaknesses

Loss of key staff

Sustainable financial backing

Economy - home, abroad

Seasonality, weather effects

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Further analysis

The output of the workshop session are the potential characteristics of the problem. Further analysis is required to validate the actual characteristics. Ideally these should be confirmed with data.

Once the characteristics have been validated, identify the most important issues and develop the strategic options. One approach is to compare the internal strengths and weaknesses against the external opportunities and threats and develop strategies for each aspect.

Consider :

how the strengths listed can be used to exploit potential opportunities

how the strengths listed can be used to reduce vulnerability to threats. Can the threats be turned into opportunities?

how a weakness can be overcome to pursue an opportunity.

how to establish a defensive plan to prevent a weakness from making the organisation, business group or solution susceptible to external threats. What actions can be taken to avoid the threat?

What can be done to maintain, build and leverage on the strengths listed?

Prioritising the listed opportunities and select those opportunities to be taken further

Development of mitigation strategies to counter the threats listed

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Marketing Practice : Vespa : Fashion Unchanged

Vespa is back in a new avatar or rather in its Original avatar. The brand which died in 2006 is being resurrected by its original owners is set to change the way Indian consumers think about scooters. Vespa initially came to India in 1960 with partner Bajaj and later through LML. The brand had a tough ride in the Indian market with some few successes like LML Vespa Select. But the brand failed to bring in volumes which eventually led the demise of this stylish brand.

Although Vespa had a different image compared to its rival Bajaj, the brand was never considered to be lifestyle oriented. Consumers considered it as a stylish scooter and the image ended with that.

This 2012, Vespa has come back to Indian market with its original persona of an Italian Scooter. The launch is significant because of the iconic status that Vespa enjoys elsewhere in the world. It is also interesting to see how Indian consumer will welcome the second homecoming of the brand.

The main reason behind the relaunch of Vespa is the increasing interest shown by consumers towards the scooter segment. According to Economic Times, Indian scooter market is around 2.5 million units growing at CAGR of 20%. Lot of new launches are happening in this market and consumers seems to prefer the utility of this product.

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What is interesting in Vespa is the brand's positioning as a fashion statement. For the first time in this segment, a brand is exploring the possibility of creating a new market - lifestyle scooter. The target segment is youth who wants to be different, make a style statement. Essentially a psychographic segmentation. The brand is now focusing on print campaigns which makes sense .

The brand has the tagline " Fashion Unchanged" and is drawing power from its legacy dating back to 1945. The brand uses funky colors and evokes as sense of youthfulness that fits a fashion brand.

The brand has done it right in terms of the product design. The scooters looks cute and stylish and the advertisements looks chic. Although the product reviews are average, Vespa is expecting to sell for its looks and more importantly its brand image. The brand owners are repeatedly telling that Vespa is not for power-hungry as an excuse for the poor engine specifications. But hope they don't forget that consumers should get a decent deal when the brands commands a premium. Poor specs cannot be masked through colorful advertisements and lifestyle positioning.

The challenge for the brand is to show value. The brand is expensive and the specifications is nothing special so getting Indian youth to open up their wallet for the sake of looking fashionable seems to be a tough task.

The silver lining is that this is the era of design and experience. Lot depends on the brand's ability to convey fashion statement through the product.

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The steep price will force customers to compare value with the workhorses like Activa, although Activa is not a style statement. There is a chance that the brand will remain aspirational restricted to a few. The brand could have done wonders if it was priced at an affordable range and get more on the road - some thing like an affordable fashion statement. But Italian arrogance is visible in the pricing. The brand with the styling and premiumness can make Indian consumers drool or will they ?

Piaggio Group: Vespa makes its official debut on the Indian market.
Apr 28, 2012 ,two days after the press launch in Mumbai, the official opening of the new Piaggio

Group factory in Baramati (State of Maharashtra) to produce Vespa scooters for the Indian market. Roberto Colaninno: an event of enormous importance for our Group and for the two-wheeler sector: today the Vespa becomes a truly global vehicle. Powered by a new eco-friendly 60 km/litre engine, the Vespa developed specifically for the Indian market is based on the Vespa LX, the outright best-seller on the European two-wheeler market and the best-selling European two-wheeler in the USA. Marketing of the scooter is beginning in Indias 35 largest cities, through a distribution network already comprising 50 exclusive Vespa dealers. The initial production capacity of the new plant in Baramati is 150,000 vehicles/year; capacity will double to 300,000 scooters/year by the end of 2013.

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Mumbai (India), 28 April 2012 The Vespa, the worlds most famous and best-selling scooter, is making its official debut on the Indian market, sealing the Piaggio Groups move into a new phase of its globalisation strategy.

Two days after the press launch in Mumbai, the official opening was held today of the new Piaggio Group plant in Baramati (State of Maharashtra), which is to produce Vespa scooters for the Indian market.

The opening ceremony was attended by Sharad Pawar, the Indian Minister for Agriculture & Cooperation, Praful Patel, the Indian Minister for Heavy Industry & Public-sector Companies, Ajit Pawar, the Deputy Prime Minister of the State of Maharashtra, and the Italian Ambassador to India, Giacomo Sanfelice di Monteforte. Piaggio Group Chairman and CEO Roberto Colaninno headed a delegation of Piaggio senior management, including Piaggio Group Deputy Chairman Matteo Colaninno and Ravi Chopra, Chairman and Managing Director of the Indian subsidiary Piaggio Vehicles Private Ltd.

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Roberto Colaninno said: Today is an event of enormous importance for the Piaggio Group and for the entire two-wheeler sector. With its entry on to the Indian market, the Vespa becomes a truly global vehicle, targeting a new class of young, highly educated Indian consumers, who follow events around the world very carefully and keep a close watch on changing international lifestyles and consumer patterns. This is one of the reasons why the launch of the Vespa in India, a country with extraordinary potential, coincides with a completely new phase in our Groups globalisation strategy: focus on the end customer on every major market where the Piaggio Group operates, attention to the specific needs and requirements of the various geographical areas, product marketing and technical development geared to delivering state-of-the-art products in every market. Only thanks to this approach can we maximise the success of our bestknown brands and develop innovative new product ranges.

The Vespa production plant opened today is the third factory set up by the Piaggio Group in Baramati, a city in the Pune district of the State of Maharashtra. The area is home to the manufacturing complex of Piaggio Vehicles Private Ltd., a wholly owned Piaggio Group subsidiary which already produces three-wheel goods and passenger vehicles (and is the market leader in India, with annul sales of more than 220,000 vehicles) and, in an adjoining facility, scooter engines for the Vespa and diesel and turbodiesel engines for the commercial vehicle ranges produced by Piaggio in India and in Italy, in Pontedera. With the opening of the Vespa production plant, the Piaggio Group industrial complex in Baramati now provides jobs for approximately 3,000 workers.

The new Vespa factory is located on an area of more than 150,000 square metres, including a covered surface area of 32,000 square metres. It handles the full Vespa machining cycle, from welding of the monocoques to varnishing and final assembly. The initial production capacity of the plant, which was built in just 14 months, is 150,000 scooters/year; capacity will be raised to 300,000 during 2013 as part of the Piaggio group industrial and commercial program. The Indian two-wheeler market is the worlds second-largest in terms of shipments, with approximately 13 million vehicles sold in 2011. The scooter segment with more than 2.5 million vehicles sold last year is the most dynamic segment of the market, with strong annual growth rates of more than 20%.
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The Vespa developed for the Indian market is based on the Vespa LX, in 2011 the outright bestseller on the European two-wheeler market and the top-selling European two-wheeler in the USA.

Compared with the version produced in Italy and marketed in Europe and the USA, and the model produced by Piaggio Vietnam, the Indian Vespa features a number of specific ergonomic adaptations, offers easier access to the engine and tyres, and, above all, is equipped with a brand new 125 cc 4-stroke, 3-valve engine. This completely new motor was developed by the Piaggio Group specifically for its debut on the Indian two-wheeler market: a state-of-the-art, no-noise, eco-friendly unit with significantly low exhaust and noise emissions, and exceptional fuel efficiency, with one of the lowest fuel consumption levels in the world and a range of more than 60 km on a litre of fuel.

Marketing of the Vespa, at 66,600 Indian rupees (equivalent to approximately 1,000 euro/1,260 USD at the current exchange rates), is currently beginning in Indias 35 largest cities, through a distribution network already comprising 50 exclusive dealers, on the basis of a coordinated image system dedicated entirely to the Vespa brand. The Piaggio Groups entry into the two-wheeler business in India opens up a completely new premium product segment, for customers looking for two-wheelers with a unique style and personality combined with cutting-edge technology. The global positioning developed by the Piaggio Group for the Vespa brand underpins the extraordinary sales success of the scooter, which sold more than 150,000 units in 2011. As a comparison, worldwide Vespa scooter sales in 2003 were around 50,000.

Entry on to the Indian two-wheeler market is a fundamental step in the Piaggio Group strategy targeting strong growth on the emerging markets. The Group is projecting global sales of more than one million vehicles in 2014 and significant growth in revenue, with a consolidated net sales target of approximately 2 billion euro for financial year 2014. In terms of revenue breakdown, in 2014 the Piaggio Group expects Asia to account for 50% of revenues, compared with 8% in 2003 and 25% in 2009. In 2011 the Piaggio Group shipped a total of 653,300 vehicles worldwide
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(a 4.0% increase on 628,400 vehicles sold in 2010), of which 415,000 two-wheelers (scooters and motorcycles) and 238,300 three and four-wheel commercial vehicles.

In 2011, the Group reported consolidated net sales of 1,516.5 million euro (+2.1% from 2010), EBITDA of 200.6 million euro (+1.7% on 2010), net profit of 47 million euro (+9.8% from 2010). Net debt at 31.12.2011 was down to 335.9 million euro (349.9 million euro at 31 December 2010). During 2011, the Piaggio Group increased capital expenditure significantly especially for the development of industrial operations in the emerging countries to a total of 126.1 million euro, a rise of 31.1% from 96.2 million euro in 2010. Of total investments, 38.3 million euro were in R&D, which also reported expense of 30.2 million euro. As a result, 2011 spending and investment in R&D rose by 8.9% from the 2010 figure.

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The Modern Generation

By 1990 sales for the Vespa scooter had plummeted badly compared to previous decades. Indian markets were fully-served by government factories manufacturing Bajaj and LML copies of the Vespa. Asian markets were saturated with Honda and Yamaha scooters that were cheaper and easier to operate. U.S. markets had forgotten about the Vespa and opted for Japanese imports that ran cleaner engines. Italy and England seemed to be the remaining bastions for the old brand. All that Vespa was producting was the PX model, which was just a rehash of the 1970s P-series model. Piaggio had to rethink and redesign its scooter. The critical demands included a modern design, a cleaner engine, an attractive package that would once again bring in the youth, and a product that appealed to a generation that wasnt even born when the last 1970s model was produced. The approach of the ET line of Vespas was created. The ET model shed some of the weight of the all-metal PX and brought the engine range down in size. Instead of sticking to one engine choice, the ET line allowed swappable engine sizes ranging from 50cc to 150cc. The engine model was completely replaced as well with a fourstroke design to address cleaner emission regulations, both in Europe and in the U.S. The body retained the basic shape of the traditional Vespa, but it removed all the various metal parts and made the body frame more streamlined. The transmission was changed to an automatic version versus the old manual hand-shift approach, much to the chagrin of Vespa purists. The new scooter still kept the 10 inch size wheels, maintaining the scooters maneuverability, particularly at a time when many urban areas were suffering from a glut of car traffic. As a result, the new product mix worked and the Vespa was once again allowed back into the U.S. as a new vehicle in 2001. Five years earlier, Piaggio had celebrated 50 calendar years with the Vespa and over 15 million units sold since 1946. But had it not been for the ET, that birthday might have been one of the last for the historical scooter. Despite the success of the ET, however, Piaggio was still suffering financially.

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The company had created too much operational and financing debt for itself not being efficient in its fiscal commitments. Piaggio was about to find itself in bankruptcy by 2003, being unable to raise sufficient revenue to offset debt via sales and being undercut still by cheaper Asian competition. Early on Piaggio had left the control of its original family owner. In 1959 the same family that owned Fiat took over Piaggio Incorporated. This ownership lasted until 1999 when it was then bought by Morgan Grenfell Private Equity, looking for some kind of an investment payoff in a deal destined to then be sold to the Chinese. Subsequently, the company was up for sale again but did not budget until 2003. Robert Colaninno stepped with a 100 million Euro stake via Immsi SpA. The trade back was a third ownership of Piaggio and direct management control of the company. Given that Morgan Grenfell was more investor than manager, they took a turn with Colaninno at the steering wheel. Modeling operations after Japanese factory efficiency modes, Piaggio forced every new scooter to be built back on the assembly line again for reduced costs and scales of economy in resource/material ordering. Colaninno linked labor benefits to performance and quality as rated by customer approval. Nobody was fired, but nobody got a raise either until the company again proved its merit to the consumer. Deadlines were imposed again, getting idle workers pumping out product. The ongoing financing challenge needed to be met by a much larger scale of funding. This was not going to be raised by Piaggio continuing to follow the private investor road. To match the competition of Honda and Yamaha, the Italian scooter company was going to need stronger leverage. The public investment market was the answer. Colaninno took Piaggio onto the public market in mid-2006, and now trades under the ticker symbol PIAGF for trader and investor alike.

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