Italian Vespa motor scooter maker Piaggio plans to produce as many as 10 scooter models at a restructured joint venture in China, according to Forbes magazine, which noted that the troubled firm aims to crank out 300,000 scooters per year within three years – some two-thirds as much as its global shipments last year.
The report said the Piaggio hopes to pick up a significant share of the China scooter market and also expects to expand its outsourcing of parts though its new investment partner, Zongshen Group, China’s largest non-government maker of motorcycles and components.
Those purchases will increase Piaggio’s global competitiveness against such rivals as Yamaha, Honda and Suzuki, Forbes added, noting that Yamaha last year sold as many two-wheelers in Europe as Piaggio.
At a time when major vehicle makers are looking at China plants to lower costs, Piaggio realizes “the significance of the China threat,” Marco Mussita, an executive at Italy-based Banca Intesa, told Forbes, adding: “So for them, it’s important to partner.”
Forbes noted that China accounted for 42% of the 32 million two-wheelers sold worldwide last year, but only 15% of industry revenue of $44.9 billion because of relatively low average prices.
Profit has also been hit by overcapacity and restrictions on new license plates in major cities already clogged with passenger cars though rural areas are promising because the government is moving to boost rural income and development, the report added.