Piaggio Slashes Vespa LX125 Prices in India to Bolster Slow Sales

Piaggio launched its Vespa scooter brand at last January’s Indian Auto Expo to much fanfare but sales have fallen short of expectations. The Vespa LX125 launched in Indian showrooms in April as the first new Vespa scooter offered in the country in 13 years, but Piaggio has only sold about 25,000 units.

That might seem like a lot, and would be, for the U.S. market, but in India, it’s a sliver in a market that bought 2.5 million scooters in 2011. Remember, this is a market where some Hero MotoCorp sold a half million units in a single month. Of course, the Vespa LX125 is positioned as a premium product with a relatively high price and limited production. That being said, the new assembly plant in Baramati, India, has a production capacity of 150,000 units this year, with plans to double capacity by the end of 2013, so sales of 25,000 units is disappointing.

One reason behind the slow sales is the Vespa LX125′s premium price. Piaggio launched the scooter with a price of 66,600 Indian rupees or about $1,211 in U.S. currency (prices do vary slightly from region to region). That’s much cheaper than the $3,349 Vespa USA is asking for the LX50, but in India it’s relatively high compared to its competition. The 110cc Honda Activa, for example, is priced at 46,387 rupees (US$765) in Delhi. Hoping to boost sales, Piaggio has responded by cutting the price for the Vespa LX125 by about 10%. Dealerships in Delhi, for example, are pricing the Vespa LX125 at 59,996 rupees.

It may be time to upgrade the Vespa LX125 as well. The Indian version of the LX125 is equipped with drum brakes, but for the price Piaggio is demanding, consumers may demand disc brakes. IndianCarsBikes.in reports a new variant with disc brakes is on its way for 2013, along with a new “sporty” variant. ICB says Piaggio is hoping to increase sales to 90,000 units by 2013.

[Source: IndianCarsBikes.in, Piaggio India]

By Dennis Chung