Pune: Piaggio India is bracing for a “transitional” period in June-July and says the three-wheeler sector, “neglected” over the past year, needs a fillip.
“We expect a progressive reopening of our outlets across India in June and July, which will be a transitional period for our business. We also expect a real revamp in sales and demand, but people also need confidence to visit the outlets, given the current situation,” Piaggio India’s chairman and managing director Diego Graffi told TOI.
Piaggio manufactures a range of premium scooters under its Vespa and Aprilia brands in India. The automaker said these scooters received a “very good response” in terms of sales and that it was on track to cross its sales targets till April before the second wave caused closure.
Graffi said this also disrupted the manufacturing process, with raw materials reaching unprecedented costs.
“We did not have regular production in May, with a total utilization of less than 50% of our capacity. There were supply chain issues with many vendors affected by the lack of oxygen supply. There has been an unprecedented rise in raw material costs,” Graffi added.
Graffi also expressed concern about the commercial vehicle market in India, in which Piaggio has significant interests. The company manufactures vehicles — mainly three-wheelers — in the cargo and passenger spaces and has also made electric vehicles in the commercial segment. Piaggio and its competitors have seen major dips in its India sales in that segment.
“The three-wheeler sector has been completely neglected … three-wheelers provide employment to many people in India, and there are a lot of options for the commercial vehicles sector, such as revising GST on three-wheelers for a few months, having a specific scrappage policy to make the shift to BS-VI emission standard, and priority-sector lending,” he said.