Small Victories: Sales Up 60 Percent at Vespa Maker Piaggio

What auto company would not kill for 60 percent growth in 2008? Admittedly, the numbers aren't huge, but Italian motorcycle maker Piaggio Group (whose brands include Vespa, Moto Guzzi and Aprilia) sold 21,000 scooters, mopeds and bigger bikes in the U.S. last year, up from just 12,000 in 2007.

"That was a good result, because it shows the ever-increasing size of the U.S. market for scooters," said Paolo Timoni, president and CEO of Piaggio Group America. He cited high gas prices, traffic congestion and a parking squeeze as encouraging the growth of the scooter market. According to Timoni, 220,000 scooters were sold in the U.S. in 2008, compared to just 20,000 in 2000. But Piaggio sells 600,000 scooters annually in Europe, so the American market has a lot of catching up to do.

The company re-entered the U.S. market in 2000, and in the first few years it barely had a dealer network. According to Vespa Brand Manager Kevin Andrews (whose history includes more than a dozen years at Ford, where he directed branding for the Lincoln Town Car), there were 100 dealers in 2006 and 325 today.

The lineup for affordable commuting includes six Vespa scooters (50- to 300-cc) ranging in price from $3,299 to $6,199) and six Piaggio-branded bikes ($1,999 to $8,899), including three with two front wheels. A hybrid MP3 will be added in the first quarter of 2010. "It's a tribute to high fuel prices," Andrews said. "A bad economy makes motorcycles a good value proposition."

Timoni said that Europeans start riding scooters at age 14, abandon them for cars at 18, and then go back to scooters for commuting in their late 20s. "There are millions and millions of them in Europe," he said. "Because of high fuel costs, commuting to work in a car there is expensive and inconvenient."

There are pockets of U.S. Vespa sales success in urban metro areas, mostly on the coasts, where people navigate costly and congested commutes. New York, San Francisco, Seattle and Los Angeles are top cities.

The company is advancing a green argument. If Americans switched 10 percent of their total miles traveled to scooters, they'd save $56 million and reduce fuel use 14 million gallons per day, the company says as part of its "Vespanomics" campaign. The scooters range from 55 to 115 mpg (though the latter, with just 50 cc, are not highway capable).

Last week, Piaggio took Vespanomics to the Newark International Airport, where it has entered into an agreement with Continental Airlines. The airline has 3,000 regional employees, and the deal offers them 10 percent discount purchase discounts and preferred airport parking.

The first step was getting employees acclimated to two wheels. Andrews said that 150 airline workers were guided through training in a parking lot adjacent to the airport, and that most had never been on any kind of motorcycle before. For most (including me as a journalist guest), it was a real confidence builder.

"I was on a committee last year talking about the impact of high fuel prices on our employees, most of whom come in from a 20-25-mile radius," said Gavin Darraugh, a Continental community affairs manager. "Many of them could easily get here on a scooter. This is a win-win for Vespa and Continental." A second round of rider training is likely to take place next year. Several employees expressed interest in buying a bike, so the novel approach to brand marketing seems to have worked.

The view from a Vespa in old Quebec: