Piaggio May Use Lml As Sourcing Base

This forms part of the Rs 300 crore expansion plans of LML to achieve a turnover of Rs 1600 crore by 1998-99.

According to LML sources, the decision to use India as the export base is primarily because Indian products can be sold at half the price as compared to the product manufactured by Piaggio back home.

A detailed export strategy is currently being worked out by LML Ltd in which Piaggio has a significant 25 per cent stake to facilitate a greater export thrust for LML. It also hopes a more cost competitive environment for Piaggio products in the fast growing Latin America market. LML is currently exporting to about 40 countries. It is however, felt that a large amount of adaptation will have to be carried out on the Piaggio models which are successful in Europe, before launching developing countries.

It is for this reason that LML has started laying stress on indigenisation and in fact its latest product, Supremo, Sensation and Star are fully indigenised.

The Indian and the Latin American market demands are quite similar. Hence it makes sense for LML and Piaggio to route the products developed here for the Latin American markets, said a senior LML official. Earlier, Deepak Singhania, managing director of LML Ltd said that having established itself well in the Indian market and indegenising successfully, the company is now keen to lay more stress on exports and reach out to new markets like Latin America and Africa.