Jun. 30, 2008 – Setting the stage for a big summer

During a time when most of the powersports industry is struggling, Piaggio USA is posting record sales, including breaking its all-time monthly sales record in May by more than 1,000 units. Company officials report several dealers have sold two or three times as many new units compared to the same period last year, and all indications point to a strong summer selling season.
Powersports Business recently interviewed Piaggio USA CEO Paolo Timoni about the impact of oil and gas prices on scooter sales, the company’s progress on selling scooters in car dealerships and Piaggio USA’s parent company’s sales decline overseas.
PSB: Do you believe the sudden increase in gas prices is the sole reason sales were up so dramatically in May? Also, do you see this upward trend continuing throughout this summer, as well as the rest of 2008?
Timoni: The sudden increase in gas prices has been a strong catalyst. For many people who have been considering the purchase of a scooter in the last few months but had been on the fence, the gas price increase had them run to dealerships and finally buy the product that they had been considering for awhile. The trend will continue to be strong through the summer and 2008 will close significantly ahead of last year in terms of retail sales.
PSB: How are the sales of Piaggio scooters in U.S. car dealerships faring? The last time we talked you had mentioned this was something Piaggio was experimenting with.
Timoni: It is working very well with many success stories to report. Car dealers have large customer bases, good financial and managerial capabilities, good understanding of transportation issues. When they apply their capabilities and enthusiasm to motor scooters they can achieve great results. At the same time, the majority of our dealers are powersports and most of them do extremely well.
PSB: If oil prices were to suddenly plunge, say below $100 a barrel for example, how much impact would that have on Piaggio’s success in the U.S. market?
Timoni: Piaggio has been very successful even when gas prices were at $2 a gallon and our retail sales have been growing both in 2006 and 2007 when the market was flat. There are major benefits associated with driving a motor scooter even with oil below $100. We see the future with reasonable optimism.
PSB: What are the main reasons Piaggio U.S.A.’s parent company has set out such a conservative outlook for the remainder of 2008? Are sales in the U.S. market helping to make up for the supposed lag in sales in places like Europe, for example?
Timoni: While the market in the U.S. is doing very well, several markets in Europe are contracting as a result of a worsening of the economic situation. European sales are still a larger part of Piaggio Group, overall business.
PSB: What are the company’s expectations for sales through the summer, and right now do your strong sales in May and June have you believing 2008 will be a bigger year, sales-wise, than originally expected?
Timoni: Motor scooters retail sales in May and June will be more than double the level of last year. Also retail sales of our motorcycles are growing in a declining market. 2008 will be the best year ever in the history of Piaggio Group Americas.
PSB: Besides Chicago, where Piaggio reported extremely high sales for May, are there any other specific markets you’re seeing higher number of scooter sales across the U.S.?
Timoni: Everywhere. In all major metropolitan areas East and West, North and South. Sales are very strong also in minor markets with growth in smaller CBSAs being even marginally higher than in larger CBSAs. In order for motor scooters to contribute to the solution of high gas prices and congested traffic in U.S. cities, however, we need to focus and improve parking facilities and the licensing process. psb