Piaggio Drops Marketing VP, Sales Staff

Confirming rumors from last week, Dealernews reports that Piaggio USA has cut a few management positions, including vice president of sales/marketing and three sales directors. President/CEO Paolo Timoni looks into his crystal ball and speaks:

We don’t expect 2010 sales to go back to 2008 numbers.”

Thanks, Nostradamus! We’ve long mocked PiaggioUSA’s top-heavy management, expensive infrastructure, Harley-style marketing, and ridiculous sales goals, so maybe this is just the change they needed. PiaggioUSA does seem to slowly learn from their mistakes, so hopefully this is just a step towards a more sustainable model for long-term U.S. success, rather than the first step towards abandoning the U.S. market–yet again–when things look grim.

12 thoughts on “Piaggio Drops Marketing VP, Sales Staff”

  1. Piaggio marketing??
    They blow into town hang a shingle out in the local Suzuki dealer for a year or so and blow town – next closest dealer – 250 miles away (seems like Texas could support a quite a few dealers – we have great riding weather). Honda and Yamaha – right down the street for years.
    And who knows what hoops Piaggio had these guys jump though for the privilege.

  2. Ha, Phil, Timoni said, “we hope dealers appreciate that basically all the infrastructure and organization to support and service them has been untouched.”

    If PiaggioUSA’s support and service infrastructure was already working flawlessly, that would be reassuring, wouldn’t it!?

    But to be fair, they have improved there, to some degree, too.

    PiaggioUSA, like all US scooter importers, is going to be fighting for survival over the next couple years, it’s nothing short of that. Here’s what they need to do to survive:

    1. Stop dumping scooters and adding dealers for the sake of artificially inflating sales. That’s been speeding up your demise all along, continuing that practice is a death warrant. Feed stores and gas stations should not be selling scooters, Scooter shops sell scooters.

    2. Reduce costs by reducing overhead (NYC high-rise offices) and staff. Get rid of italian-suited industry-wonk types (not all, of course, you need some) and replace them with some people with real passion for scooters who understand the U.S. market.

    3. Focus on the dealer relationship, look at which dealers survive through this year. Make those dealers happy, they’re your lifeline. No new dealer you sign stands a chance against your best current dealers.

    4. Beef up support of VCOA and other enthusiast grassroots groups and events. These artists, college students, retirees and other outcasts are the people that are going to keep your brand alive in the U.S. whether you’re here or not. They will eventually ignite the next boom in scooters. You screwed this group last time and it cost you, If you’d warmed up to the existing U.S. scooter infrastructure instead of charging cokehead socialites a million dollars for permission to build a boutique, Genuine and the Stella and Buddy wouldn’t exist.

  3. I don’t think you guys understand that the phrases “quarterly reports” and “sustainable business model” are mutually exclusive. It’s troubling that when a group can’t see more than 3 months ahead is in a business that is governed by seasons and known for ephemeral trends.

  4. Well, sure, Brooke, maybe they can’t succeed by nature. I imagine they’re under a lot of pressure from Pontedera, and probably irrevocably tied to both the Italian business model in general, and the worldwide Piaggio distributorship model specifically, both of which are shaky on home turf and just worthless in America.

  5. I wouldn’t blame the home office. I just question the wisdom of current economic leaders in general. People that run Piaggio are of the same cloth as any other executives. Very few are interested in anything beyond the next quarterly report or at best year statement (for bonus purposes). Dumping bikes to inflate sales is not something that they pioneered. Apple was the master of announcing ‘sold units’ and ‘shipped to store units’ before and after the Holidays. It’s triple counting a single sale: reporting the shipment to stock the store, reporting the sale of the unit to a customer and then reporting the restocking shippments. It’s all just a method to inflate share price in the short term. Luckily for Apple, they’ve had great sales of good products to back it up. Piaggio on the other hand…

  6. You bring up a good point, Brooke. I’m a little underwhelmed with Piaggio’s offerings of late. I realize it takes a lot of money to bring a new model to market, but it really seems like their current strategy with Vespa is to just trot out various ‘limited editions’, and color schemes of their LX and GT(S) platforms.

    If they’re going for the high end of the market, it’s not a bad idea to study the Harley model. Up until the current recession, H-D has been very successful by marketing not just the bike, but the lifestyle. They heavily support the Harley Owners Group (HOG), while Piaggio USA’s support of AmeriVespa has been tepid at best. At AmeriVespa 2007 they didn’t even offer a scooter for the raffle, and Kymco had as big a presence there as they did (!).

    I guess investing now to gain market share at the expense of quarterly profit isn’t part of their business model. Given how small a share of their total market we are, I do find it hard to blame them. It takes courage and vision to see a market that isn’t there yet.

  7. You make a good point about the small market. But they have already tried the lifestyle marketing idea. You must have missed their return in the early part of the decade. It was all about selling all the accouterments of Vespa in a ‘Boutique”. They have missed the boat on the owners groups, but that’s a worldwide strategy gaffe.

  8. should Piaggio decide to take another temporary “vacation” from the USA would the Vespa buyers turn to Genuine for a scooter??…..Buddy or Stella do have the retro look….Vespa’s vacation probably would make the rumored Genuine 300cc retro bike a reality. ….Maybe Kymco could also fill in the gap with the arrival of their newly designed retro 2010 “Like” model…Like has a familiar Vespa appearance and comes in 50, 125 and 200 entries…..the mentionioned scooters are alternatives but are no where equal to bikes from Piaggio/Vespa as they are ‘the’ gold standard of scooters

  9. Im happy to say I have been shot down by Piaggio for a Vespa dealership four times. From the Vespa dealers I have talked to, it looks like I dodged a bullet.

    My father and I met with Peter Laitmon back in 2000 wanting to open a dealership in Santa Monica. We were told that all of Southern California was Mike Malimut’s territory. My father told them they were making a huge mistake giving a large area to one guy. Malimut wound up being a huge problem for Piaggio USA because of his exclusive contracts.

    I was also shot down for the Piaggio franchise when Vespa Sherman Oaks refused to carry them. Piaggio decided to wait over a year for Vespa SO to give in. To be honest I was just looking to get a foot in the door at Piaggio to get some parts and possibly the Vespa franchise if Vespa SO ever closed.

    Then I was shot down twice for Vespa in Pasadena. I had an investor ready to go. They later gave a franchise to a large powersports dealer in San Gabriel (where there is no market for scooters). Since they are within ten miles of Pasadena, nobody can open a dealership there. Piaggio USA has since crammed as many dealerships into the LA area as they could. I know of one that is ready to close unless someone is stupid enough to pay the $190,000 price tag for the dealership.

    Since 2002 we have developed a reputation for servicing, having accesories for, and selling used Vespas. The local dealer made customers wait three weeks for an oil change or a tire, where we can usually get them in within a day or two (usually same day). I have had Vespa dealers in rural areas ask me to sell their new bikes since Piaggio dumped way too much stock with them. I refused to do this since I could see it becoming a legal problem.

    Piaggio needs to keep feeding bullshit to their dealers about not carrying Genuine. The Buddy is a far superior product to their Chinese build Fly models that nobody buys. The Vespa dealers that are making money are the ones that carry Genuine, and Piaggio knows this.

    I have been happy selling new Genuine, Kymco, and SYM scooters. If Piaggio ever pulls out again, I will be the guy in LA keeping their scooters on the road.

    Mike Frankovich
    NoHo Scooters

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