Piaggio Targets Revenue of $1.4B in Asia
Net sales to increase from 133 million euros to 1 billion euros by 2014
The first step of the plan involves almost doubling the size of Piaggio’s Vietnamese production facility to 538,000 sq. ft. from its current 280,000 sq. ft. size.
Since the plant near Hanoi, Vietnam, opened in June 2009, the Italian manufacturer has seen net sales nearly triple to 133.2 million euros (US$190.9 million) in 2010 from the 45.2 million euros (US$64.8 million) reported in 2008.
Piaggio plans to expand the Vietnam plant to 538,000 sq. ft. Piaggio plans to triple to the production at the Vietnam plant to 300,000 scooters a year from the current annual production capacity of 100,000 units. The expanded facility will house a new research and development center which will focus on developing new vehicle concepts and new engines with lower fuel consumption and emissions. Piaggio is also planning a separate scooter engine production plant will be built in the area with a planned annual production capacity of 250,000 units.
“Today is a highly important event for our Group, laying the foundation for us to become one of the most important Italian industrial players in the whole of Asia,” says Roberto Colaninno, chairman and chief executive officer of the Piaggio Group. “Thanks to the extraordinary success of our initial investment in Vietnam, today we are moving into the second phase of our growth strategy.”
Piaggio will investment 150 million euros (US$215 million) for the Asian market between 2011 and 2014, on top of the 30 million euros (US$43.0 million) already invested in the current Vietnam facility. The 150 million euros will be split with about 60 million euros (US$86.0 million) in Vietnam and 90 million euros (US$128.9 million) in India.
“The major expansion of the industrial facility in Vietnam is part of our strategic plans, which see Asia as the main growth factor for the Piaggio Group in the next few years. In recent years we have seen a sharp increase in demand for two-wheelers in Asia, especially in Vietnam, South East Asia and India,” says Colaninno. “I am convinced demand will continue to grow at a healthy rate over the coming years, in parallel with the rapid urbanization of the main Asian nations and rising consumer spending power. The Piaggio Group is poised to reap the benefits of this growth.”