Mumbai: Italian two-wheeler and light transport vehicle maker, Piaggio Group, plans to re enter the Indian two-wheeler market through its Indian arm, Piaggio Vehicles Private Limited, as a part of a broader strategy to expand its Asian operations that also focus on China, Vietnam and Japan.

It plans to 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.

The Group is also studying the feasibility of launching two- , three- and four-wheel hybrid vehicles in India, by 2010.

Piaggio owns well-known brands that include Piaggio, Vespa, Gilera and Derbi and has factories in Italy, Spain, India and China.

The group's chairman and chief executive officer Roberto Colaninno illustrated the strategic guidelines for expansion of the Group's operations in Asia during a press conference held in Mumbai today.
 
He said the Piaggio Group had recently reached an agreement confirming and strengthening its cooperation with Japan's Daihatsu Motor Co., Ltd. (Daihatsu), in light transport vehicles.

The agreement covers the supply by Daihatsu of power trains (1,300cc petrol engines and transmissions) for the current Piaggio Porter range of light transport vehicles; and supply of parts, components and assemblies by Daihatsu for the new models in the Porter and Quargo ranges mounted with the new small-displacement Piaggio turbodiesel and diesel engines for manufacture by its wholly owned subsidiary Piaggio Vehicles Private Limited (PVPL).

As part of its expansion in the country the Piaggio Group today signed an eight-year agreement with Greaves Cotton Limited through PVPL, under which Greaves will
continue to supply PVPL with the GL 400 BSII mono cylinder diesel engines and beginning in 2010 supply the G 435 BSIII mono cylinder diesel engine when the Bharat III emissions regulations come in to force in India.

Greaves will provide PVPL with the engines, as the sole supplier of monocylinder diesel engines for Ape three-wheelers built by PVPL, thus enabling the Piaggio Group to meet its objectives for eco-compatibility, efficient fuel consumption and general product price competitiveness.

In addition to the supply agreement with Greaves announced today, the Piaggio Group has a close partnership with Lombardini / Kohler, which supplies PVPL with the 482cc liquid-cooled 5-speed diesel engine mounted on the Ape Truk four-wheeler.

Headquartered in Pune PVPL currently produces the Ape three-wheeler range of passenger and cargo vehicles, and the new Ape Truk four-wheel commercial vehicle with a carrying capacity of 800kg, launched in July, 2007 at its manufacturing plant in Baramati.

In 2007 it more than tripled its sales volumes to 154,000 from 49,600 vehicles in 2003.

Asia Pacific operations
The Piaggio Group built more than 200,000 two-wheelers in 2007 at its Chinese facility at Foshan run through an equally owned joint venture since 2004 with Zongshen Group, which makes the Piaggio brand of vehicles for distribution in the European market and on a co-branding basis for the Chinese market.

In Vietnam, it has commenced construction of a new facility in the Hanoi area, which is expected to be completed by the end of 2009. The factory will produce Vespa scooters for the local market. The total investment, for which the Group has established a 100% controlled subsidiary, Piaggio Vietnam Co. Ltd., amounts to an estimated between $25 and $30 million.

Piaggio's operations in Japan are conducted through the subsidiary Piaggio Group Japan Corporation, established on January 1, 2008, to strengthen Piaggio's market position and rationalise the import and distribution of vehicles for all Group brands. The subsidiary will coordinate sales and marketing, taking a role similar to that of Piaggio Group Americas Inc. in North and South America.