Paolo Timoni describes how this iconic scooter manufacturer is throttling up to break into the US market.

Ever since Gregory Peck gave Audrey Hepburn a ride on his Vespa in 1952’s “Roman Holiday,” the motor scooter has been a popular form of transportation in cities throughout Europe and Asia. Americans, however, have never given the scooter more than a cursory glance.

Paolo Timoni and the team at Piaggio Group, creators of the Vespa, believe that’s about to change. “All of the elements are in place,” said Timoni, president and CEO of Piaggio Group Americas. “With traffic congestion, gas prices going up, and more and more people concerned about the environment, we see great potential.”

The potential is great (research indicates roughly 60 million people in this country would consider using a motor scooter to improve fuel economy and cut emissions). But just as great, if not greater, is the challenge of getting car-loving Americans off four wheels and on top of two—a challenge Piaggio Group Americas enthusiastically accepts.

The wasp
Ever since Rinaldo Piaggio established the company in Pontedera, Italy in 1884, Piaggio Group has been helping people get from A to B. The company’s various products have covered the history of modern transportation, from ships to locomotives to aircraft.

Paolo Timoni

The president decided to take the company in a new direction by responding to one of post-war Italy’s most urgent needs—an affordable and reliable form of transportation. He tasked aeronautical engineer Corradino D’Ascanio with designing a vehicle that was easy to drive for both men and women, able to carry a passenger, and that kept the driver’s clothes clean.

When D’Ascanio introduced his compact two-wheeler, with its thick rear section connected to the front section by a narrow waist, Piaggio allegedly exclaimed “Sembra una vespa!” or “It reminds me of a wasp!” The name stuck and in 1946 the Vespa was born. Piaggio Group has produced more than 16 million scooters to date, and if Timoni and his team are right about the market in the US, that will be just the tip of the iceberg.

Growth strategy
Shortly after Timoni became chief executive at Piaggio Group Americas in 2004, he met with the senior managers in the organization to mull over an important question, “Where do we want to take the company?”

Discussions led to two conclusions: Piaggio would aggressively pursue geographic expansion, and it would diversify its product portfolio. Action on the second conclusion came quickly when the company acquired motorcycle manufacturers Aprilia and Moto Guzzi at the end of 2004.

In terms of geographic expansion, North and South America became primary targets, with the United States at the top of the list. “Our presence in North America at the time was very small,” Timoni said. “We had roughly 20 employees and very little revenue.”

In the US motorcycle market, Timoni said the organization’s Aprilia and Moto Guzzi bikes stand out as premium brands due to their performance and styling. The challenge, he said, is to create an organization capable of providing customers and dealers with the highest levels of service.

With scooters, the challenge is far greater: create the market. “That’s part of the excitement here, having a chance to create a market that doesn’t really exist in the US,” Timoni said. “In most other situations, you join an industry at the stage where most of the development has already happened, where there are rules and a structure that are very difficult for a single company to change.”

Scooters 101
In February 2006, Piaggio sent an open letter to “all US mayors concerned with America’s oil consumption.” The letter, which also appeared as a full-page ad in the New York Times, detailed how the use of scooters would greatly reduce fuel consumption and lower emissions.

“We encourage you to broaden the dialogue about energy self-sufficiency to include both technological solutions and behavioral ones, fostering acceptance of alternative transportation, such as scootering,” Timoni wrote.

The letter was a prominent example of one of Piaggio’s most important efforts in breaking into the US market—education. Not only did the company have to educate consumers about the benefits of its products, it had to train dealers on how to present and sell scooters, and teach leaders, such as mayors and other regulators, how to make their cities more scooter friendly.

“There is a structural lack of parking options for scooters. There are no dedicated lanes,” Timoni said. “But there are a number of things that can be done to foster their co-existence with cars. We’re creating a public debate on this broad theme so more people understand why in London, Rome, Barcelona, and other European cities, you see many people driving motor scooters.”

As Piaggio spread the scooter word, it also aggressively expanded its US dealer network. By the end of 2006, the company had more than 180 dealers in the US, more than double the number in 2004. The result of these educational and operational efforts has been a year-over-year growth in sales of 15% to 20%, and the company believes it could double its $130 million revenue within four years.

“We’re already seeing significant growth. But we believe we’re still in the infancy stage of the industry’s development,” Timoni said. “At some point in time, we’ll go into hyper growth year over year. We cannot predict for sure when the tipping point will happen, but I’m very confident it will.”