Sunday, October 14, 2007

Piaggio to Open Vietnamese Plant

According to reports all over the Internet, Piaggio is set to build a manufacturing plant near Hanoi. The $25-30M investment is a strategic move in order to avoid the costs of transport, duty and other fees on imported scooters. According to the Thanh Nien News Vespas cost around four times that of most motorcycles.

The factory will have a capacity of producing 100,000 models a year, but is said to have a goal of 50,000 annually by its fifth year. With numbers such as that, I wonder how much of Piaggio's manufacturing may be transferred there? According to a press release in 2006, Piaggio reported production numbers for their plant in Pontadera, "production volumes in 2004 were just over 50,000, approximately 87,000 in 2005, and more than 100,000 in 2006." With numbers such as that, the Vietnamese plant could produce enough for multiple countries. The Vietnamese scooters will likely be distributed throughout surrounding Asian countries, but the nagging question remains: Is Italian production of Piaggio doomed?

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