Piaggio lines up new investments, to launch electric three-wheeler before 2020

Italian three-wheeler giant Piaggio is lining up investments for expanding production capacity and for development of new products for the Indian market.

Though company officials stated that they are yet to freeze the final investment plan, Diego Graffi, MD & CEO of Piaggio Vehicles, told Moneycontrol that they are planning to invest at least Rs 100 crore.

Piaggio on Thursday rolled out the 2.5 millionth vehicle from its Baramati plant. It is the second biggest manufacturer of three-wheelers in India after Bajaj Auto.

"Our target is to go to 3.5 million in the next 3-5 years. For this we are expanding our product lineup as well as increasing our retail footprint to 500 dealerships from 400 at present," said Graffi.

Though Graffi said that Piaggio is well placed to handle vehicle demand from its existing facility, the company will, however, need to expand the engine and transmission facility.

As per data supplied by the Society of Indian Automobile Manufacturers (SIAM), Piaggio clocked volume growth of 26 percent to 40,401 units during the April-June period as against 32,108 units sales clocked during the same period last year.

The three-wheeler segment grew by 54 percent during last quarter to 161,673 units where market leader Bajaj Auto clocked a growth of 94,431 units. While Piaggio has a market share of 25 percent Bajaj has a market share of 58 percent.

Much of that growth has come from the doing away of three-wheeler permits by various states; the major on being Maharashtra. Mahindra & Mahindra is the third biggest company in this space.

Graffi also said that Piaggio will launch an electric three-wheeler over the next 20 months in India. Rival Bajaj Auto is also working on a fully electric three-wheeler that will be launched next year. M&M is also planning on entering the fray with its own electric three-wheeler.

Though electric passenger three-wheelers are already operational in Delhi and other areas, they are mostly of Chinese origin with lead acid batteries.