Piaggio, Europe’s leading manufacturer of two-wheeler and three-wheeler motor vehicles.
Piaggio Group operates globally in two markets in the light mobility vehicle industry:
- two-wheeled vehicles (consisting of scooters and motorcycles);
- and commercial vehicles (both three- and four-wheeled light commercial vehicles).
Piaggio Group is the leading European manufacturer of two-wheeled vehicles and one of the leading producers of three-wheeled vehicles in India.
The macroeconomic framework
During 2019, global economic growth reported a modest slowdown, to stand at a figure of 3%. This trend was more evident in the real economy, involving in particular the industrial and manufacturing sectors, which were considerably affected by trade tensions between the US and China; the rates dispute, along with the matter of Brexit, contributed to a sharp decline in investments.
The US economy decelerated, however recording a growth of 2.3% thanks to a boost from consumption, which accounted for over two thirds of economic activity. Growth in capital expenditure and exports waned considerably, while salaries started to decrease, reflecting the increasing rigidity of the labour market, while inflation stabilised.
The two main economic strongholds in Asia reported signs of a slowdown: in China (+6.2%) investments and consumption were strongly impacted by the uncertainty over the trade war; the Yuan appreciated against the Dollar, but inflation went up. In India, GDP decreased (by around +5.8%), while the cut in interest rates made by the Reserve Bank has not yet had an effect on the real economy, due to a clamp down on credit in the non-financial sector, while consumption fell, affected by the low rate of employment. Economic growth in Japan stabilised (+0.9%); the effects of the expansive monetary policy eased off and at the same time, domestic demand fell considerably, negatively affected by an increase in excise duties.
The economy in the Euro area ended the period recording a strong downturn (just +1.1% compared to +1.9% in 2018); continuing uncertainties over geopolitical factors, the growing threat of protectionism and vulnerabilities of emerging market weakened confidence, particularly in the manufacturing sector. In this context, inflation drivers remained low and indicators of inflation expectations pointed to a decrease. Considerable monetary stimulus is therefore necessary to ensure favourable financial conditions to support growth.
GDP in Italy amounted to 0.2%, slowing down considerably compared to 2018. Company investment prospects improved slightly compared to the start of the year, thanks in part to tax relief being re-introduced for capital expenditure. Growth is still being driven by private consumer trends, supported by an increase in employment and the introduction of the “citizen’s income scheme”; the net foreign component had a negative impact due to the slowdown in exports of goods and services and increase in imports, mainly due to the global trade crisis.
Currently available figures for monitored markets, and specifically the performance of the two-wheeler segment (scooters and motorcycles) are reported below.
India, the most important two-wheeler market, reported a significant reversal in its trend in 2019, closing the year with less than 18.6 million vehicles sold, down by 14.2% compared to 2018.
The People’s Republic of China posted another decrease (-5.2%), closing the period with just over 6.5 million units sold.
The Asian area, termed Asean 5, reported a slight increase in 2019 (+0.8% compared to 2018) ending the period with over 13.7 million units sold. Indonesia, the main market in this area, reported slight growth (+1.6% compared to 2018), with total volumes of just under 6.5 million items. Thailand recorded a slight decline in 2019 (1.7 million units sold; -3.3% compared to 2018); Malaysia reported a considerable increase compared to the previous year (nearly 547 thousand units sold; +15.9% compared to 2018). Sales in Vietnam trended downwards in 2019 (3.3 million units sold; -3.9 % compared to 2018), while the Philippines recorded another increase (1.7 million units sold; +7.2% compared to 2018).
Volumes of other Asian area countries (Singapore, Hong Kong, South Korea, Japan, Taiwan, New Zealand and Australia) decreased slightly in overall all terms, compared to the previous year, with around 1.3 million units sold (-3.0%). In particular, Taiwan continued the trend of the previous year, closing the period with approximately 705 thousand units sold (-6.6% compared to 2018). Japan continued its negative performance, with sales down to 362.5 thousand units (-1.8% compared to 2018).
The North American market recorded a slight increase (+0.3%) compared to 2018 (519,976 vehicles sold in 2019).
Brazil, the leading market in South America, continued its positive trend, and thanks to a considerable increase in sales (+13.2%) ended the year with 1.084 million vehicles sold.
Europe, the reference area for Piaggio Group activities, performed well in 2019, with an overall increase of 8.1% in sales compared to 2018 (+7.9% for the motorcycle segment and +8.2% for scooters), ending the period with approximately 1.384 million units sold.
The scooter market
The European scooter market in 2019 accounted for 689,000 registered vehicles, with sales up by 8.2% compared to 2018.
In 2019, the North American market still reported a downturn (-3.8%), with 25,274 units sold:
The main scooter market in the Asean 5 area is Indonesia, with over 6.1 million items sold, reporting an increase of 5.2% compared to 2018. The automatic scooter segment reported considerable growth in 2019 (+5.5% compared to 2018, with nearly 5.7 million units sold). The Cub segment also increased slightly in 2019, closing at +1.1% at 459 thousand units.
After years of growth, the automatic scooter market fell by 16.0% in 2019, closing at 5.8 million units sold. The 125 cc segment was the best performer, with 5.7 million units sold in 2019, accounting for 97.7% of the total automatic scooter market. The 150 cc segment reported a considerable decline (-38.7%), mainly related to sales of the Aprilia SR 150, with 21,389 units sold in 2019. The 50 cc scooter segment is not operative in India.
The motorcycle market
With approximately 695,000 units registered, the motorcycle market ended 2019 with a 7.9% increase. The 50 cc segment also performed well (+15.0%) closing with 38,629 units sold, while the over 50 cc segment increased by 7.5%, closing the period with 656,808 units sold
The motorcycle market in North America (USA and Canada) recorded a slight increase in 2019 (+0.5%), closing the period with 494,702 units compared to 491,997 the previous year.
India is the most important motorcycle market in Asia, selling 12 million units in 2019, accounting for a 12.9% decrease. The motorcycle market in the Asean 5 area is far less important than the scooter sector. Sales of motorcycles in Vietnam were not significant. In other countries, the highest sales were recorded in Indonesia; however with 373 thousand units sold it reported a decrease of 34.6% compared to the previous year.
In 2019, the European market for light commercial vehicles (vehicles with a maximum mass of up to 3.5 tons) where the Piaggio Group operates, continued its growth trend, selling 2,115,650 units, with an increase of 2.8% compared to 2018 (source ACEA data). In detail, the trends of main European reference markets are as follows: Germany (+6.9%), France (+4.5%), Italy (+3.4%), UK (+2.4%) and Spain (+0.3%).
The Indian three-wheeler and LCV cargo market (the latter with vehicles that have a mass below 2 tonnes), on which Piaggio Vehicles Privates Limited - the Piaggio & C. S.p.A. subsidiary - operates, reported the following trends: