Vespa's Re-entry Strategies for the Indian Market

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Case Details:

Case Code : MKTG304
Case Length :15 Pages
Period : 2012
Pub Date : 2013
Teaching Note : Available
Organization :Piaggio Vehicles Pvt Ltd
Industry : Indian scooter market, two wheeler market
Countries : India

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"Ours is not a scooter, it is a Vespa and a way of life. The idea is to awaken a sleeping potential consumer who does not have such a product. He (consumer) wants to be part of an exclusive community and make a statement." 1

-Ravi Chopra, CMD, Piaggio Vehicles Pvt Ltd ,2 India, 2012.

"The idea of a premium scooter does not exist in the market at this point of time, again we are not super premium like the bikes of Harley or BMW, but we are a lifestyle statement sort of a scooter." 3

-Krishna, AVP Marketing, Piaggio Vehicles Pvt Ltd, India, 2012.

In March 2012, Italy-based automotive company Piaggio, known for its scooters and motorcycles, re-entered the Indian scooter market after 13 years through its own subsidiary Piaggio Vehicles Pvt Ltd. Piaggio's re-entry was part of its global expansion strategy to attract the youth and new generation riders with a new, modern looking Vespa scooter in vibrant colors. Industry observers felt that the Indian scooter market provided an opportunity for Vespa to gain a strong foothold despite its scooter being priced higher than comparable models of other companies.

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Although the Indian two wheeler market was dominated by motorcycles, scooters had exhibited remarkable growth over the years. This growth had encouraged many players to enter the Indian scooter segment. HMSI 4, Yamaha 5, Piaggio, Suzuki 6, Hero Motocorp 7, Mahindra Two wheelers8 , and TVS9 competed fiercely in coming out with new products to gain a significant market share in the competitive automotive market. Piaggio was optimistic about its re-entry and aimed to double its production by the end of 2014. However, the challenge before Piaggio was to sell Vespa as a premium product to the Indians while making it sustainable and to ensure that the Vespa was a vehicle to which Indians would aspire.

About Piaggio and Vespa - Next Page >>

1] Murali Gopalan, "Can Premium Vespa Swing It with the New-Gen?,", July 1, 2012.
2] Piaggio Vehicles Pvt. Ltd. is the Indian subsidiary of the Piaggio Group.
3] "Can Vespa's Premium Tag Recreate Its Past Glory?,", June, 25, 2012.
4] Honda Motorcycle and Scooter India Private Limited (HMSI) is the Indian subsidiary of Honda Motor Company, Limited, Japan. It was set up in 1999.
5] Yamaha Motor India Pvt Ltd is the Indian subsidiary of Yamaha Motor Company, Japan. It produces a range of motorcycles, which includes the FZ16, FZ-S, Fazer, and R15.
6] Suzuki Motorcycle India Private Limited is a subsidiary of Suzuki Motor Corporation, Japan.
7] Hero Motocorp Ltd., formerly Hero Honda, is an Indian motorcycle and scooter manufacturer.
8] Mahindra Two Wheelers Ltd is a subsidiary of Mahindra & Mahindra. It makes scooters and motorcycles.
9] TVS Motor Company Limited is the fourth largest two-wheeler manufacturer in India. It manufactures motorcycles, scooters, mopeds, and auto rickshaws.

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