Piaggio is a global auto producer which is known for its last mile connectivity in business. The Italian company has generations of expertise in manufacturing three-wheelers and two-wheelers. It is the owner of renowned three-wheeler brand Ape and two-wheeler brands such as Vespa, Aprillia, Moto Guzzi, Derbi, and Gilera. The automaker has been manufacturing three wheeler commercial vehicles from its plant in India which is operated by Piaggio India, a wholly owned subsidiary of Piaggio Italy. Piaggio ranks second both globally and in India in the three-wheeler market and exports its models to 42 countries. The company has partnered with the MV Dugar Group to expand its foothold in the Nepali market and aspires to be the market leader in Nepal in two years. Sudhanshu Agrawal, associate vice president of Piaggio Vehicles was recently in Nepal to promote the growth of three-wheelers and e-autos. Madan Lamichhane of New Business Age caught up with Agrawal to talk about the market for three-wheelers, Piaggio’s expansion plans, the partnership with MV Dugar Group, among other topics. Excerpts:
How is the market for three-wheelers in Nepal?
The three-wheeler segment is growing exponentially. The ban on the import of three-wheelers in Nepal was revoked at the end of 2014 and sales of such vehicles restarted in 2015 in the country’s Terai region. There has been high demand for Piaggio after the first three-wheeler entered Nepal. Last year, the growth rate of three-wheelers stood at 125 percent compared to 2016. With our new association in Nepal with the MV Dugar Group, we are hopeful for a growth of 30 percent to 40 percent this year. The target next year is 45 percent and we want to be the market leader in the next two years.
Three-wheelers are economical and effective for passengers in developing countries. The initial investment for buyers is low and it is also cost effective for the passengers compared to other means of transportation like taxis.
What are the features of Piaggio three-wheelers?
Our product directly benefits customers as they are equipped with an engine system which is well-proven and one of the most reliable engines in the industry. A second unique feature is the suspension system in Piaggio vehicles. The suspension incorporates advanced technology that provides comfort to the customers and has low maintenance cost. Piaggio vehicles come with a robust build design compared to other brands. Also, the overall dimension of the three-wheeler is bigger and three passengers can sit comfortably in the back seat. The vehicle has proven mileage which is actually a direct saving for customers. Despite all high-end technological features, the vehicle is priced at just Rs 519,900.
Piaggio has a wide array of products in its portfolio. No other brand apart from Piaggio has the cargo three-wheeler range.
What challenges exist for Piaggio in terms of market expansion?
Lobbying stands as a challenge while introducing a new brand. Various interest groups raise their concerns when a brand attempts to expand its market. Nevertheless, I find more opportunities than challenges in Nepal. As auto rickshaws are reliable, safe and comfortable, they can replace e-rickshaw in Nepal. The expansion of the road network in rural and semi-urban areas has created more opportunities for auto rickshaws here.
How is Piaggio positioned globally?
We are the second largest three-wheeler brand in India after Bajaj. We entered India in 1999 and have been growing very rapidly since then. We have been taking away a market share every year from our competitors. Despite the competition, we hold a market share of 80 percent in the cargo segment. Both in India and globally, we are the market leader in the diesel segment while we stand at second position in the petrol segment. We forayed into the petrol segment in 2013 and have been growing regularly.
How important is Piaggio’s partnership with MV Dugar group?
MV Dugar Group is a well established business conglomerate with a strong network across Nepal. The group has over 44 years of experience in the automobile industry and has service and spare parts centres. So, MV Dugar Group can introduce our products in 30 locations at once from where efficient after sales services will be facilitated. We are confident that we can successfully provide quality services to our Nepali customers because of MV Dugar Group’s infrastructure and human resources. The financial strength of the group also supports us in providing facilities to our customers.