Piaggio to invest Rs 75 crore over 5 yrs

Piaggio Vehicles Pvt Ltd, the Indian subsidiary of the Italian automobile major, will invest around Rs 50-75 crore over five years, funded entirely out of its internal accruals. While its four-wheeler is likely to debut in the second half of 2005.

"The gross block of Piaggio's investment in India is about Rs 200 crore to date," Ravi Chopra, managing director, said. Over the past two years, the company has invested about Rs 60 crore on expanding its capacity from 40,000 to 100,000 three-wheelers per annum, he added.

The subsidiary aspires to become the sourcing hub of Piaggio's global market for three-wheelers components. "In two years exports will account of 20 per cent of our sales," Chopra informed.

The past year and half was spent in evolving 18 international destination of the Indian products. The investments will take care of all expansions in this direction as well, he explained.

Launching Piaggio's latest light cargo vehicle - the 1.3 tonne Ape three wheeler, here today, Chopra said the plan is to expand the capacity by another 36,000 vehicles next year.

"The investment will be negligible given the mere modular changes required," he added.

Contrary to earlier reports, Chopra said the commercial launch of Piaggio four-wheeler is not scheduled to be launched in the current year, though the prototype is undergoing tests. The company will also be launching its 1.5 tonner three-wheeler by end-2005.

Commanding about 40 per cent market share in the cargo three-wheeler segment, Piaggio has persevered to price its products at premium even in this price-sensitive market.

With over 200,000 Ape 1 tonners on the roads, Piaggio has launched its 1.2 tonner at Rs1.80 lakhs (ex-showroon) in Chennai. "It's the value-add and adaptability we offer that helps us sell in this market," Chopra said in defence of the pricing policy.

The 1.3 tonner Ape comes with a 12 horsepower drive, 4-speed transmission geared for 0-100 metres acceleration in 15 seconds and a rated payload of 800 kg. It has a wheel-base of 2390 mm. The vehicle has done a trial run of over 1 lakh km on Indian roads. It comes with a nine-month unlimited kilometres warranty.