Not movin’ on
The press release from Piaggio, dated November 7, was just one paragraph:
“With regard to a report about the Piaggio Group published this morning in the Corriere della Sera, the company categorically denies that it has any plans to transfer its headquarters. The suggestion in the newspaper is wholly false and has no basis in fact. The company will take all possible steps for its protection.”
The report referred to above had Piaggio & C. S.p.A. moving its corporate HQ to New York City, which is where Vespa/Piaggio Americas is presently located.
Why? Nobody is saying. For all we know, CEO Roberto Colaninno might just be tired of Italy. Personal and corporate taxes would most likely be lower in the U.S. Pontedera is kinda frayed around the edges, for sure.
But the U.S. and Canada are hardly a significant market. The company says it sold just 20,000 Vespa-branded scooters in North America in the first half of 2014. That’s a drop in the bucket compared to Asia, or even recession-addled Europe.
Moving to New York would be a bad idea, even for a company that somehow thought the Vespa 946 made sense.
But, it could be argued, so is staying in Italy.
Like the other eurozone countries, Italy’s low birth rate and aging population make future sales growth unlikely, even if the folks in charge of the government can be convinced the austerity thing wasn’t such a good idea.
When Fiat became Fiat Chrysler, it incorporated in the Netherlands (because it’s a tax haven) and moved its HQ to London (because… they like warm beer?). But long before that happened, Fiat was a global company, with assembly plants in Poland, Brazil, Argentina, Turkey and elsewhere. Post-merger, the company has far more manufacturing capacity in North America than anywhere else.
Piaggio moves much more metal in South and Southeast Asia (and not just scooters; small commercial vehicles are a big deal, too). While the shiny new factory in Baramati, India was initially touted as capable of producing 150,000 Vespas annually, its output so far, while far smaller, is still many more than are likely to be sold in North America in CY 2014.
In addition to India, Piaggio builds bikes in Vietnam and China; the latter venture is slated to produce small motorcycles for Brazil and the rest of South America. Vespas sold in America are built in Italy because, they say, Americans wouldn’t accept Asia-built Vespas.
This isn’t 1946. It’s not 1964, either. The world is a far different place in the second decade of the 21st Century. Those who might gnash their teeth and rend their garments over Asian Vespas are only interested in vintage ones, anyway. LML sells way more new-old P-series in Europe than Genuine does Stellas in the U.S. At some point, Piaggio is going to have to realize they could sell way more scooters in America if they’d consider the possibility that a market exists beyond hipsters in Williamsburg, Brooklyn.
The holding of one’s breath is not advised.