Piaggio Group’s board of directors has approved a three-year business plan in which the company projects an annual growth rate of nearly 7 percent in net sales, with an EBITDA margin of roughly 14 percent of net sales in 2009.
To do this, the plan — aimed for a period from 2007-’09 — focuses on expanding the company’s presence internationally, including growing its motorcycle business and extending its reach into the Indian and North American markets; consolidating its European leadership in the scooter and light transport vehicle businesses; expanding its Chinese joint venture; and introducing further innovations in both its product range and engines.
One of the company’s first goals is to consolidate its European market leadership through the introduction of new models, such as the three-wheeled RPM scooter, and also scooters with hybrid engines. Piaggio also hopes to strengthen the consumer awareness of its brands by segmenting its customer base according to market demand.
To expand its motorcycle business, the company will focus on enhancing the company’s brands and broadening its product offering for the European market. To accomplish this, Piaggio plans to focus Derbi on the small to medium cc segment and Aprilia on the medium and top-end with high-performance vehicles. Moto Guzzi aso will expand its range of products.
In addition, the company has plans to extend its off-road segment and hopes to enter the superbike world championship.
Renewed International Focus
In both the two-wheel and light transport vehicle (LTV) sectors, Piaggio intends to enhance operations in markets where it’s already present, such as North America, and enter into three new markets.
In North America, the company will be expanding its motorcycle and scooter range for the Vespa, Moto Guzzi, Aprillia and Piaggio brands and extending the distribution network. Plans are also in the works to boost market penetration and continue to raise customer awareness of the environmental and economical benefits of two-wheel light transport.
In China, Piaggio is involved in a joint venture to develop new vehicles to take advantage of the booming two-wheel market in that country.
The company also is looking at possible entry into Brazil, Vietnam and India. A strategic marketing approach has yet to be decided, but the company has said it will be based on markets offering high-growth rates during the next few years with limited investment requirements.
Piaggio’s three-year plan also calls for its light transport vehicle sector to be subdivided between Europe and India.
In Europe, the company will focus on extending the sales network in Italy and other parts of Europe by optimizing sub-dealer performance and assessing new sales channels. Piaggio says marketing strategies there will take a more targeted approach, leveraging extensions to service offers for greater customer satisfaction and retention of professional customers.
Piaggio’s strategy for India includes an extension of its offer for the cargo segment and an upgrade of its offer for the passenger segment. Plans are also in place for improvements to customer service, along with an expansion of the company’s distributor network. Piaggio’s vehicle production factory will be extended to reach a capacity of 200,000 units during the next few years, along with plans to build a new diesel engine plant, which is scheduled to begin production in 2010.