What a new factory in Vietnam means for Piaggio

Dailies -

By

piaggio-vietnam

Piaggio officially cut the ribbon on its new engine assembly plant in Vietnam today, a move which will see it ramp up scooter production to 300,000 units annually in that country. Piaggio Vietnam produces both Vespa and Piaggio scooters for the Asian market and this plant is part of a massive expansion on that continent. By 2014, Piaggio forecasts that its annual volume will exceed 1,000,000 vehicles a year, with 50 percent of its revenue coming from asia. In comparison, the entire on-road market in the US was just 565,000 motorcycles.

“Today is a very important event for our Group. It is based on the success achieved by Piaggio Vietnam since 2009 and lays the foundation for a new phase in our expansion strategy in South East Asia,” states Piaggio Group CEO Roberto Colaninno. “The results reported by the Piaggio Group last year validate our global growth strategies, which identify Asia as the key to Group growth in the next few years, by virtue of the rapid urbanisation of the main Asian nations and rising consumer purchasing power.”

The plant will produce 125 and 150cc engines for Vespa models and the Piaggio Liberty and Fly scooters sold in Southeast Asia. Piaggio has already built 180,000 scooters in Vietnam since production began there in 2009.

“These are four-stroke, three-valve 125 and 150cc engines with [fuel economy of 144mpg, US], whose emissions and fuel consumption are among the lowest in the world,” explains Colaninno.

To reach that 300,000 scooter volume, Piaggio plans to invest €70 million in Vietnam between now and 2014.

This factory is just the latest in a massive, industry-wide shift in motorcycle production. For the last half century or so, most of the efforts of bike manufacturers were focussed on catering to the large-capacity western markets in North America and Europe. The 300,000 scooters annually number isn’t necessarily the big news here — there’s always been a lot of little bikes sold in Asia — but rather its the 50 percent of revenue thing. Piaggio is a western company that’s hitherto chased western companies. That’s changing and it’s changing very fast. Piaggio isn’t alone, even that most premium of premium bike makers, Ducati, is opening up plants in the far east and designing products specifically for markets there. Motorcycle companies industry wide are forecasting and chasing growth not in America or Europe, but in India, Thailand, Vietnam, China, Brazil and other developing markets.

  • FFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFF

    Those are some big numbers. Italian bonds hit an all time high recently; like, 7%. That was probably a really good buy.

    • Scott-jay

      InfinityF nails it, “Those are some big numbers. “

  • http://www.TroyRank.com Troy R

    And they have to beat out the venerableHonda cub to make those numbers, but i hope they succeed

  • Core

    “These are four-stroke, three-valve 125 and 150cc engines with”

    Three valves?

    Please someone explain this to me who’s technically smart.

    I took a small engines course, but something about that isn’t clicking.

    • Mykola

      two intake valves, one exhaust valve

    • http://rider49er.blogspot.com Mark D [EX500]

      Aside from being a compromise between a simple SOHC design and better breathing, I know Mercedes used to say that a single exhaust valve helped catalytic converters warm up faster. Granted, I have no idea how that’s possible, but it may be an emissions decision, too.

    • Scott-jay

      Honda Shadow & Ascot ’80s vee-twin series rolled three-valves, two spark plugs per cylinder.
      And, technically smart.

    • 2ndderivative

      5-valvers exist too, Yamaha makes ‘em for instance.

  • Toby

    I seem to have chosen the perfect time to move to Thailand (although of course I’m far more excited about the Thai-built Monster) ;)

    • Archer

      I’m always surprised at how inexpensive Thailand is, perhaps because of all the time I spend in Japan.