The company's Indian arm, Piaggio Vehicles Private Ltd (India) is also currently investing Rs 150 crore to ramp up capacity at the Baramati plant in Maharashtra.
"The scooter segment in India is growing at a tremendous pace. No company would like to miss this opportunity and for that we need to be in the mass market segment," Piaggio Vehicles Pvt Ltd (PVPL) Chairman and Managing Director Ravi Chopra.
At least in the next five years, the segment is expected to grow at a CAGR of 18-20%, he added.
According to Society of Indian Automobile Manufacturers, scooter sales in India grew 24.55% to 25,62,841 units in 2011-12.
The company has already started working on a new product with technology from Piaggio's stable, he said.
"It takes about 18-20 months to up with a product and our expectation is that by end of 2013 we would be ready to launch it," Chopra said.
While he declined to share further details, Chopra said: "This would not be under the Vespa brand, which we have positioned in the premium segment. For the mass market segment we will have a different brand."
Piaggio Group had launched Vespa LX125 priced at Rs 66,661 (ex-showroom in Maharashtra).
"Similar to what we did with the Vespa engine to customise based on the needs of the
Indian market, the new scooter will also be based on requirements here," he added.
Commenting on the response to the Vespa, which made a comeback to the Indian market in April this year, he said: "So far, we have a total of 8,500 units in retail sales and bookings. We hope to do around 40,000-45,000 units by the end of this calendar year."
The current output at the plant is about 10,000-12,000 units a month and is being ramped up gradually. The company expects to have full capacity utilisation by the end of the year, he added.
The Baramati plant currently has an installed capacity of 1,50,000 units per year.
"We are investing Rs 150 crore to double the capacity at the plant by the fourth quarter of 2013 so that in 2014, we can do at least 20,000 units a month by 2014," Chopra said.
On expansion of sales network, Chopra said the company plans to have a total of 100 dealerships by the end of the year, up from the existing 48 in 35 cities.
"When we have 100 dealers, we will be present in almost 75-85% of the Indian market," Chopra said, adding the firm would also be launching 'an intense TV campaign' by August end ahead of the festive season for the Vespa brand.