Sales Slump but Vespa Marketing Scooters On

Someone should tell Piaggio Americas CEO Paolo Timoni that the average American family who he says can save $6K a year by buying a Vespa doesn't live in NYC, where most people don't own one car, much less two. How about an event in Los Angeles, a city where people can ride year-round, where families do own two cars, and which is easily navigated by surface streets rather than the clogged and dangerous freeways?

This is indicative of Vespa's long-running failure to properly market its product. They're a luxury brand, with the highest MSRPs and cost of ownership in the scooter market. Their two big advantages over the competition from Japan and Taiwan are style and build quality—not being economical or gas mileage.

While they should be investing in targeted marketing in specific markets, Vespa spreads it thin by holding an event in NYC and going the cheap route through online campaigns seen only on their sites.

Instead of capitalizing on last year's booming sales to reinforce the brand's image, Vespa rested on its reputation and lost the 150cc and under segment (which has the most appeal for urban commuters or family errand runners) to its competition. Now that sales (and gas prices) are down, they're marketing up the wrong tree. The financial incentives Timoni mentions are offset by what he neglected to mention: the higher costs of registration, insurance, parts and maintenance for a Vespa.

Practicality doesn't sell Vespas. Nostalgia, style and design, and the romance of the scootering life sell Vespas. Customers with the means to pay a premium for the brand and indulge their appreciation for both the company's heritage and the undeniable quality of the product buy Vespas. Yet much to the frustration of owners such as myself, Piaggio USA doesn't get this.

For Vespa, the product is its own best advertising. I love the jealous looks I often get when riding around on my Vespa. But there's no local marketing support to push those looking jealously to the dealers. As many dealers have told me, buyers who come in looking for a Vespa only to suffer extreme sticker shock will often still buy a scooter—usually the lower priced Genuine Buddy. So instead of promoting its brand, Vespa has spent money on trying to tear down the competition and keep Genuine scooters off the floors of their dealers.

This could all spell trouble for Vespa's future in the US and the tarnishing of its image here. When Vespa returned to the US market after being chased out by Honda in the 1980s, their marketing emphasized the the fun and freedom of ownership as a lifestyle choice. Many potential owners in younger demos now choose less pricey options and Vespa is in danger of being seen as the choice for older and more affluent buyers: a Mercedes sedan, instead of a BMW Z4. This is already the case in much of Europe (even Italy) and Asia, where more practical Japanese and Asian models dominate.

Wake up, Paolo.

Well put and right on, ealmendral.

There is nothing wrong with being the Lexus of scooters if you will simply recognize that perception and make it central to your marketing message — were Vespa to actually do any marketing. "We have a website" does not equal online marketing. As elamendral has pointed out, a Vespa may be able to compete against a car on price, but not against the rest of the scooter marketplace — and as that marketplace continues to grow here in the USA that famous Vespa name won't be worth the markup much longer.

For the record, yes, I am a Vespa owner — and for precisely the reasons that elamendral listed. "Nostalgia, style and design, and the romance of the scootering life..." I'll add build quality* to that list. Those are the only things that will overcome the price difference. That is Vespa's unique selling proposition and really always has been.

*when I say build quality, I'm referring to the all-steal monocoque construction, the adjustable suspension, and the overall quality of fit and finish. It's still an Italian bike, which means it'll need to get worked on now and then, but a Vespa is built to a different standard than your asian tube-and-plastic scooters and it's something I found worth paying extra for.