Commercial Vehicles

Revenues of commercial vehicles

The Commercial Vehicles business includes three- and four-wheelers with a maximum mass below 3.5 tons (category N1 in Europe) designed for commercial and private use, and related spare parts and accessories.

Reference market and positioning

The Piaggio Group operates in Europe and Indian on the light commercial vehicles market, with vehicles designed for short range mobility in urban areas (European urban centres) and suburban areas (the product range for India).

The N1 category European market accounted for 1.5 million units in 2010, up on 2009, of which 180,000 units were sold in Italy. In Europe, the Group distributes its products mainly in Italy (which accounted for 63.9% of the Group’s volumes in Europe in 2010), as well as in Germany (18%), Spain (3.9%) and France (3.9%). The Group acts as operator on these markets in a niche segment (urban mobility), thanks to its range of low environmental impact products.

Sales on the Indian three-wheeler market went up from 411,000 units in 2009 to 502,000 in 2010, registering an increase of 22%.
Within this market, the passenger transport vehicles subsegment continued its growth trend, selling 408,000 units, up 23.8%, while the cargo segment reported an increase of 14.8%, with sales increasing from 82,000 to 94,000 units.
Piaggio currently holds a leadership position on this market, with a share in the three-wheeler sector of 39%, consolidated during 2010 thanks to its own position in the cargo and passenger subsegment.
The traditional three-wheeler market in India is flanked by the four-wheeler light commercial vehicles (LCV) market (cargo vehicles for goods transport) where Piaggio Vehicles Private Limited operates with the Apé Truk and - since 2010 - with the Apé Mini. The LCV cargo market accounted for sales of 259,000 units in 2010, up 39.2% over the same period in 2009.

Brands and products

The Ape is the Group’s best-selling brand in the commercial vehicles sector. The Ape is highly regarded because of its outstanding versatility, and is the ideal solution for door-to-door deliveries and short-range mobility requirements.
The Piaggio Group range also includes the compact, robust Porter and Quargo models. Up until last year, other manufacturers supplied the engines of the Group’s commercial vehicles. The Group now has a modern 1,200cc diesel engine developed and manufactured entirely at its new production site in Baramati, India.

European range vehicles are currently manufactured at production sites in Pontedera, while the range of vehicles intended for the Indian market is manufactured entirely at the production site in Baramati.

Europe
The Piaggio Group’s commercial vehicles are intended for the intracity transport niche market, which means transit typically in a 40 km radius from a historic city centre.
The product range, comprising the Ape 50, Ape TM, Quargo and Porter, combines low running costs, an excellent specific load capacity and extremely easy handling, for access to areas that normal vehicles cannot reach because of their standard size, particularly in historic town and city centres. The Porter is the cutting-edge product in the range, with engines that offer numerous diesel and petrol fuel options, including environmentally-friendly models (“EcoSolution”), with petrol and petrol + LPG and petrol + methane bifuel versions, plus the Porter Electric, the first commercial vehicle - on the market since 1995.
The Ape Calessino Electric Lithium, launched in 2009, also features zero emissions, and is the first ever three-wheeler with lithium batteries. The Quargo, a heavy four-wheeler, which can be driven from the age of 16 with an A1 type licence, levers important component and production process synergies with the Porter, extending the range to include intracity models designed for users who are traditionally served by the Ape 50 and TM, but need to switch to an equivalent four-wheeler vehicle.
In 2010, the process to develop a new range of Euro 5 engines was completed for the European product range. This range comprises the “MultiTech” engine (4 cylinder, 16 valve, 1,300 cc engine, available in petrol, or petrol + LPG, or petrol + methane bifuel versions) and the D120 diesel engine (2 cylinder, 8 valve, turbodiesel common rail direct injection 1,200cc engine, with EGR and DPF emission containment systems).
These new technical features mark an important turning point, as diesel fuel versions, which were not available in the past, account for more than 95% of the market of users of trucks and cab trucks (competitors of the Porter).
The new range of engines allows users to choose from four fuel alternatives (diesel, petrol, petrol + LPG, petrol + methane), in addition to the electric version. This ensures that all customer needs can be met, whether from the private domain or public fleet sector, and new trends targeting alternative fuels can be harnessed (pump price tensions, incentive campaigns).
At a vehicle level, ABS (antilock braking) and EBD (electronic brakeforce distribution) systems were added to the braking system of the Porter range in 2010. This enhanced safety factor is extremely important and greatly appreciated by customers.
As for the Porter Electric, the engine and control and drive systems were re-engineered, for more comfortable handling for typical customers (fleet operators).

India
The Piaggio Group started operating on the Indian market in 1999, through Piaggio Vehicles Private Limited, manufacturing two versions of the Apé, the Apé 501 and the Apé 601. Thanks to these products, the Group has achieved a considerable level of brand awareness over the years and developed a dealer network throughout India. It has also gained an excellent reputation for customer service, quality and style, immediately acquiring a large share of the market (in the last two years, sales volumes went up by 63.1%, from 158,900 units in 2008 to 259,291 in 2010).

In 2010, the Apé City Passenger model was introduced, with petrol, diesel, gas and methane engines.
With a 275cc petrol engine version and a 395cc diesel engine version, the Apé City Passenger perfectly combines power, comfort and reliability - which are all in demand from the domestic Indian market and main export markets. The unique features make it particularly suitable for emerging countries in Africa and South America. In the 4-wheeler sector, the Apé Truk Indian range was recently added to, with the Apé Mini. Directly originating from the European range, the Apé Truk line combines an excellent load capacity/vehicle weight ratio, outstanding handling and a compact size. The new Apé Mini in particular has a 441cc diesel engine and a fuel consumption which is low on average, even reaching 29 km/l.

The distribution network

Europe
The Piaggio Group has more than 300 dealers in Europe. Development of the sales network in Europe has led to 80 dealers opening, to manage the entire product line and this has improved coverage on main European markets. This expansion has mainly concerned France, Germany and Italy, while new importers and distributors have commenced operations in Croatia, Portugal, Denmark, Poland and on other minor European markets.
Developing and improving on the sales network quality standards has been a major focus, with particular attention paid to the efficiency of the service network, standards of corporate identity, the training of salesmen and technicians and approach to customer care.
On the Italian market, the Group has 130 dealers, 70% of which act as exclusive dealers of Piaggio vehicles. The rest of the network comprises car and commercial vehicle dealers. The 130 Italian operators manage a sub-network of more than 550 sales outlets and dedicated repair centres, with the aim of providing a top level professional service which is close to end users.

India
In India, Piaggio Vehicles Private Limited has 280 primary dealers, i.e. operators that sell in more than one district, and 280 dealers that operate in a single district, as well as 250 authorised after-sales centres.
A special focus was paid in 2010 to streamlining the network, and mainly the primary network. New distribution projects also got underway in 2010 in four Latin American countries (Mexico, Ecuador, Colombia and Guatemala) and new contacts were made with market and institutional operators in 10 countries where the Group is not currently present. South America is a strategically important area, where the Group is aiming to seize on new business opportunities stemming from the diverse mobility needs of emerging markets, through its Indian range, and on more developed markets, through its European range. The recent introduction of new products to the Indian range, such as the Apé City Passenger, and the new Multitech engine for the European range, have been a source of added value during 2010 in approaching new business initiatives. In particular, the Apé City Passenger was and is increasingly fundamental in launching new distribution projects and consolidating existing initiatives.

Comments on main results and significant events of the sector

In 2010, the Commercial Vehicles business generated a turnover of approximately 497.3 million euro, including approximately 41.7 million euro relative to spare parts and accessories, registering an 18% increase over the previous year. The same trend also applies to units sold in the year, which amounted to 233,400 items, and an increase of 18.3%.

On the European market, the Piaggio Group sold 13,300 units in 2010, generating a net total turnover of 107.1 million euro, including spare parts and accessories for 20.6 million euro. The decrease over the previous year, equal to approximately 2,200 units and a turnover of 27 million euro, is mainly due to the fact that government incentives for sales of “eco-solution” vehicles were no longer available. Piaggio has focussed on the development of eco-friendly vehicles since 2009 and today, these account for a large part of the Porter range. The end of the government incentives was the main cause behind the fall in turnover. On the other hand, the Ape increased the number of units sold and turnover generated, compared to 2009.

On the Indian three-wheeler market, which grew by around 22% compared to the previous year, Piaggio Vehicles Private Limited continued to strengthen its role as reference player and market leader, with a share of 39%. Sales of three-wheelers went up from 171,700 units in 2009 to 210,100 units in 2010, recording an increase of 22.4%, in line with the above mentioned market growth. Detailed analysis of the market shows that Piaggio Vehicles Private Limited consolidated its role as market leader in the cargo segment. Piaggio Vehicles Private Limited reached a 61.9% share (55.9% in 2009), due above all to the Piaggio Apé 501 and numerous possibilities for customisation. Its market share also remained steady in the passenger segment, standing at 33.8% (37.3% in 2009). On the four-wheeler market, Piaggio Vehicles Private Limited sales volumes were basically the same as the previous year, with 10,000 units sold.
Export performance was particularly significant, with the number of units going up from approximately 3,000 in 2009 to approximately 14,100 in 2010.

Investments

Development activities targeted India, where investments continued for development of the diesel engine production site, and works began on construction of the new site for production of the Vespa for the Indian market. As regards normal operations, works began to expand the production lines for 3-wheeler vehicles, to meet a growing demand from the market.
Product development for the European range included completion of the new range of Euro 5 engines, with the MultiTech version (available with petrol, petrol and LPG, or petrol and methane fuel options) and the new 1200 cc diesel version. At a vehicle level, ABS (antilock braking) and EBD (electronic brakeforce distribution) systems were added to the entire Porter range in 2010.