September 3, 2007 – Piaggio’s sales, market share keep growing

by Steve Bauer
Managing editor
After implementing its unique marketing plan aimed at educating consumers on scooters’ economical and environmental beneifts, it seems Piaggio’s strategy is starting to grab the attention of consumers.
With sales topping $1.3 billion in the first half of 2007 and a 22 percent increase in its motorcycle division for its first quarter compared to the same period in 2006, company officials say success in multiple markets has helped the company see a healthy increase in sales.
“The European market has been going strong and has given some growth to our European revenues. Our operations here in the United States are doing very well,” said Paolo Timoni, president of Piaggio Group USA. “Year-to-date for June our market share in the U.S. grew 4 percent, compared to a 3 percent increase last year. The operation in India is doing quite well, so I think all the different operations have contributed to our increased growth.”

Success in a flat market
Timoni is particularly proud of Piaggio’s growth despite what looked to be a flat scooter market earlier in the year. Even though the Motorcycle Industry Council (MIC) reported scooter sales did surge more than 23 percent in June compared to the same period in 2006, Timoni says that Piaggio has enjoyed continued success throughout 2007.
“If you look at the MIC figures, you see that the market is slightly down in the U.S., but that seems to be mostly due to the lack of the Azuma with Yamaha for the first half of the year,” he said. “And Yamaha seems to have recognized that, and now they are about to reproduce the product. Even if you look at the 1.5 percent scooter decrease reported by the MIC, however, our retail sales increased in excess of 20 percent. So we have been the fastest growing player in the scooter market and things are going very well for us. And we see that both in the large markets, but also in the medium and small markets across the U.S.”

mp3’s indirect impact
One product that has certainly bolstered Piaggio’s scooter sales, both directly and indirectly, has been its three-wheeled MP3. The scooter was launched earlier this spring, and Timoni says the buzz surrounding the unique vehicle has brought with it increased foot traffic to Piaggio dealerships.
“Of course sales of the MP3 are going very well both in North America and Europe,” he said. “We really had a lot of interest in the months right after it launched, and I would expect it to become a very important product for the Piaggio product line.”
Timoni says the MP3 has helped not only to attract more adventure-minded consumers to the company’s dealers, but it has also brought in potential first-time scooter owners.
“As we anticipated in the beginning, the MP3 is driving a lot of interest from people who want to have more fun and explore the extreme capabilities of driving that vehicle,” he said. “And at the same time, it’s also garnering attention from people who otherwise wouldn’t consider driving a scooter.”
sustaining growth
Piaggio officals don’t foresee sales numbers declining for the remainder of 2007, and although no specifics were given, all indications are that July and August were both strong months, and expectations remain high through the rest of the year.
“I can say that there’s no major change and things continue to be positive.” Timoni said. “For the rest of the year, for the time being there’s nothing on the horizon that would indicate that we won’t be able to meet our year-end objectives. But at this point we’re not in a position to make any forecasts.”

biggest growth potential
For Piaggio’s sales to continue to be strong, Timoni says the company must stay focused on increasing its presence in the U.S. market. To do that, he says Piaggio will continue its creative and unique advertising campaigns and entering new markets and dealerships through its relationship with Arctic Cat.
“I feel that in the immediate to short-term future, we can see both the European and U.S. markets contributing nicely to the growth of the company,” he said. “And clearly, as we talk about medium to long-term plans for the company, there is still this wild card with the North American market because if the scooter market here is able to come anywhere close to what the European market currently is, our growth here would become exponential. It’s something we will continue striving for.”