The Hindu Business Line : Piaggio plans expansion of manufacturing base

PIAGGIO Vehicles, a subsidiary of Piaggio &C SpA, Italy, has drawn up plans for the expansion of its manufacturing base aimed at making the Indian assembly line its global sourcing hub.

The company has firmed up a slew of launches including a passenger variant and four-wheeler Quadricycle that would take the company's turnover to Rs 1,000 crore from Rs 600 crore now.

The Managing Director of Piaggio, Mr Ravi Chopra, said that the expansion project would enable the company to increase production capacity from about 1,00,000 to about 1,25,000.

"As opposed to the sales of about 72,000 this year, with the launch of new variants we would be able to step up the overall production capacity requiring expansion of the manufacturing base. Further, we have thus far tapped about 18 countries."

The expansion project would not involve significant capital expenditure but would be through vendor consolidation. Since the parent has chosen to make India its global sourcing hub for three-wheelers for markets in Africa, Latin America and Asia, by 2005, about 20 plus per cent of the Piaggio India sales are expected from exports, Mr Chopra said.

Addressing a press conference to launch the Ape 1.3 tonner commercial vehicle, targeting the light cargo movers, Mr Chopra said, "By the year-end the company plans to launch a passenger variant of the same. We currently account for about 40 per cent of market share in the commercial pickup segment and plan to do the same for the passenger segment currently led by Bajaj Auto. The Piaggio Ape one tonner has already achieved market leadership in the commercial vehicles category below one tonne and today there are over 2,00,000 Ape one tonners on the Indian roads."

Mr Chopra said the growth plans included increase in sales of the existing product and widening the market by introducing new products.

"By third quarter of 2005, we plan to launch a four-wheeled Quadricycle. With these launches, we will have a full complement of products under 1.5 tonne, which will help us tap the fast growing opportunities in this segment," he said.

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