The Piaggio Group, a leading manufacturer of two-wheelers with a solid base in light transport vehicles in Europe and Asia, has reached a major agreement confirming and strengthening of its strategic co-operation with Daihatsu Motor Co. Ltd. of Japan, a specialist in design, production and marketing of technologically advanced compact motor vehicles.
Addressing newsmen in Mumbai, Mr. Roberto Colaninno, Chairman and Chief Executive Officer, Piaggio Group, said the agreement extended co-operation in light transport vehicles to provide for supply by Daihatsu of powertrains (1,300cc petrol engines and transmissions) for the current Piaggio Porter range of vehicles.
The agreement also envisaged further co-operation relating to the supply by Daihatsu of parts, components and assemblies for the new models in the Porter and Quargo ranges mounted with the new small-displacement Piaggio turbodiesel and diesel engines. These engines would be produced at Piaggio’s Indian subsidiary, Piaggio Vehicles Private Ltd. (PVPL), headquartered in Pune, he added.
The new Piaggio Group in Asia operates through manufacturing and marketing subsidiaries and joint ventures in four countries – India, China, Vietnam and Japan. Its Asian operations have an industrial and commercial impact on the group’s entire product pipeline, which comprises two-wheelers and three and four-wheel light transport vehicles (Ape, Quargo and Porter).
According to preliminary estimates, the Piaggio Group reported in 2007 net revenues totalling approximately 290 million euros in India and Asia-Pacific and year-on-year growth of 18.4 per cent against 245 million euros in 2006. Specifically, the turnover at the Indian subsidiary PVPL gained 15.3 per cent to reach 238 million euros against 206.4 million euros in 2006.
The figures do not include results at the Piaggio Group’s Chinese joint venture, which are not consolidated in the group’s results. The group has a strong and successful presence in India, which will play a key role in the new organisation.
PVPL currently produces and markets the Ape three-wheeler range of passenger and cargo vehicles and the new Ape Truk four-wheel commercial vehicle with a carrying capacity of 800 kg, launched on the Indian market in July last. In just four years, PVPL has more than trebled its sales volume, from 49,600 vehicles in 2003 to more than 154,000 vehicles sold in 2007.
The group has also plans to invest 60-65 million euros in the development and industrialisation of twin-cylinder turbodiesel and diesel engines (up to 1,200 cc) and construction of a powertrain plant in Baramati. As earlier stated, the group will be partnered by Daihatsu for development and industrialisation of the new powertrains.
As part of its development strategy, the Piaggio Group, through its PVPL subsidiary, has signed an eight-year agreement with Greaves Cotton Ltd. under which the latter will continue to supply PVPL with the GL 400 BSII monocylinder diesel engine and supply it with the G 435 BSIII monocylinder diesel engine, beginning in 2010, to coincide with the pan-Indian introduction of the Bharat III emissions regulations in India.
Greaves will provide PVPL with the engines, as the sole supplier of monocylinder diesel engines for Ape three-wheelers, thus enabling the Piaggio Group to meet its objectives for eco-compatibility, efficient fuel consumption and general product price competitiveness.
The group has also a close partnership with Lombardini/Kohler, which supplies PVPL with the 482cc liquid-cooled five-speed diesel engine mounted on the Ape Truk four-wheeler.
New products
The Piaggio Group’s extensive geographical presence will accelerate development of new two-, three- and four-wheel vehicles and new engines. At the same time it will help the group enhance components and accessories sourcing operations through group global sourcing divisions in Surajpur (India) and Foshan (China).
In parallel with the supply agreements on three- and four-wheel commercial vehicles signed with Greaves and with Lombardini/Kholer, and with the recent expansion of cooperation with Daihatsu, the Piaggio Group intends to build a strategic focus on two-wheeler production and marketing in India, maximising technological innovation through development of eco-compatible engines delivering low emissions and reduced fuel consumption.
In this connection, the group recently said that it would begin European marketing of thermo-electric hybrid scooters at the end of 2008 – the world’s first large-scale application of this technology in the scooter industry. At the same time, it is conducting its market analyses to verify the feasibility of the launch of two- and three-four wheel hybrid vehicles in India, presumably at the end of 2009 or early 2010.
