Eyeing 10% market share in premium segment: Piaggio India's Diego Graffi

Piaggio India has seen its scooter sales in the 125cc segment growing from 39,779 units in the April 2018 to February 2019 period to 43,355 units in April 2019 to February 2020, as against the overall declining scooter market. Diego Graffi, managing director and chief executive officer, speaks to T E Narasimhan on what lies ahead. Edited excerpts:
 

The impact of Covid-19 on your demand?
 

We have seen a consistent slowdown since mostly mid-last week, when we in India started suffering the first effect of the coronavirus. We started seeing some effect in Pune and Mumbai. The situation in India is not the same but definitely affects retailers. The level of enquiries has definitely gone down quite a lot. Overall, the macro-economic situation is not good. There is a lot of confusion nowadays to the transition to BS-VI (emission standards, officially due April 1).
 

What helped you push sales while the market saw a decline?
 

We have taken advantage of the better brand recall we have had over the past three-four years, in terms of brand establishment and positioning. We are following a model of premium buying experience through our Motoplex Outlet model, common across the world for us. That is giving us lots of advantage in India. Definitely in the segment in which we are playing, the brand positioning, network establishment and development were the three main reasons in 2019.
 

How do you see the scooter segment?
 

Up to five or six years ago, a scooter was meant only as a commuting means of transportation — very easy, very economic, very affordable and practical to use. Now, with new features like ABS, CBS, safety measures, introduction of BS-VI, fuel injection and a lot of other features like the cluster LED headlamp are spread all across the segment. In the next three to five years, we are probably going for higher engine displacement. There is  potential for further growth for an even higher engine displacement range. We will keep on growing in the next three to five years.
 

Your product and marketing strategy?
 

We want to keep on playing in this specific segment, i.e 125cc and plus, with specific features. We don’t want to explore segments other than this. In terms of product line, we have announced a new scooter under the Aprilia brand. We are thinking about renewing the Vespa, refreshing it with maybe a light quite soon and also possibly evolving a Vespa product portfolio with fresh styling. Or have the styling of the current model but introduction of a bigger one that will come along with the current one. These are in our future plan. We want to keep on establishing and reinforcing our position in this segment. We want to target 10 per cent market share in terms of the premium segment. That is, above 125cc, through product portfolio, brand establishment, brand positioning and network development.

When do you want to achieve this? Would you also count on bikes to play a role in this?
 

At the moment, we are focusing on scooters. When I’m talking about 10 per cent, I am talking about the premium segment, above 125cc.

In motorcycles, we have started introducing superbikes under the Aprilia branch that have been doing quite well, above 1000cc, like the Aprilia RSV4 and Tuono. But, seeing the market size at the moment for these kind of bikes is limited, we have been also exploring the possibility to introduce a sport bike under the Aprilia brand in the mid-range, 200-250cc. But, we have seen overall a little bit of slowdown of this segment in the past period. So, we are revisiting our plan and are thinking of a motorbike that could be of the higher range, above 250cc or even 300cc. First of all, though, we need to consolidate in the scooter segment.

Your roadmap for, say, 2025 or 2023?
 

We want to establish and reinforce our presence in the premium segment for the Vespa and Aprilia brands. And, expand our product portfolio and try to target, let me say, a sales figure of around 150,000 vehicles (annually). That is, more or less, our target in terms of sales that is matching the production capacity we have in our Baramati (near Pune) plant. This is our major target in the next three years. What will happen after that will depend very much on evolution of the overall market.