Italian auto major Piaggio expects a recovery in demand from the second half of the current year following the formation of a stable government at the Centre.
The auto maker also plans to renew its scooter products with new contents in the next 2-3 years, besides launching an India-specific scooter next year, Piaggio Vehicles India managing director and chief executive officer Diego Graffi said.
Piaggio Vehicles India is a wholly-owned subsidiary of Italy's Piaggio Group. Besides selling iconic Vespa and Aprilia brands of scooters,it is a leading player in the diesel three-wheeler segment as well in the domestic market.
Piaggio's vehicle range includes scooters, mopeds and motorcycles starting from 50 cc to 1,200 cc under the Piaggio, Vespa, Gilera, Aprilia, Moto Guzzi, Derbi and Scarabeo brands.
The 3 and 4-wheeled light transportation vehicles are marketed under the Ape, Porter and Quargo brands.
It has a manufacturing plant at Baramati in Maharashtra, where it produces the two scooter brands.
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"Our expectation is that now we have more clarity over all, there will be a recovery of demand in the second half of the year," Graffi said.
Piaggio is currently present in the 125-150 cc premium scooter segment, in which it commands 9-10 per cent market share.
He said both the businesses- passenger and commercial vehicles- of the company have so far seen a growth, which is either at par or at times better than the industry.
According to him, the growth this year has been better than last year.
He said factors such new safety norms, which increased the cost and also hike in duty on completely built units (CBUs) have also "contributed" to the situation, impacting the growth of the industry.
It has become mandatory to have CBS (combined braking system) or ABS (anti-locking braking system) in all bikes and scooters from April this year. This has resulted an increase of around Rs 5,000 in scooter and Rs 25,000 in motorcycle prices.
"Our product and network base is very strong and capable to compensate or any other external factor that can negatively affect the demand," he said.
Scooter sales in India declined 0.27 per cent to 67,01,469 units in the previous fiscal as against 67,19,909 units FY18, as per the Society of Indian Automobile Manufacturers (SIAM).
Piaggio Vehicles also posted a growth of 14 per cent in its scooter sales in the domestic market last fiscal at 77,775 units as against the 68,169 units in the year ended March 2018.
"What we have seen is that queries are there, but there is lot of postponement of purchases from final customer, something we have not seen before," he added.
He said Piaggio is renewing its current product portfolio.
"We will have a completely new scooter brand coming in 2020. It will be fully customised and designed for India customers with lot of contents," he said.
Graffi, however, ruled out Piaggio's entry into the mass segment saying, "We are always perceived as the ones, who are into premium play. We don't intend to get into the commuter segment. We look only at scooter market, about 125 cc, which is one million in size currently."
Graffi said, "We arealso thinking of motorbikes in the mid-range of 150-250 cc in the Indian market. We have product in our portfolio outside Indiathat could be suitable, but again we want to introduce the right product with a right price position, and with the right performances."