PiaggioUSA’s announcement at their recent dealer meeting to add more dealers and reduce dealer territories obviously has current dealers in a huff. The long-term damage of a growth plan based entirely on unloading quotas of bikes to a rapidly-expanding dealer network is not only bad news for dealers, it’s also troubling for consumers, and especially for Piaggio themselves. There’s a great thread on Modern Vespa with some good insight into how Piaggio works, and how this trend may affect dealer inventory, parts supply, and service.
5 thoughts on “Piaggio’s “growth””
Comments are closed.
For the national scooter scene, I can see this as a bad thing. But considering Chicago has no decent Vespa dealer, I can’t wait for someone to start competing with Old Towne/Motoplex.
What do they mean “bad for consumers”? More dealers means better prices, more convienent dealers and service. Dealers will have to try harder to keep thier customers happy, thats not a bad thing.
Most people aren’t going to buy a vehicle from a dealer more then ten to twenty miles from their homes. This probably won’t effect the dealers that much because they only will lose the few people that are having to, and willing to, go long distances to a dealer.The people that aren’t willing to “commute” to a distant dealer aren’t buying from them anyway.
I think the whole “bigger dealers is better” attitude by the manufacturers is not what the consumers want. Dealers that have ALL the brands just hold the consumer hostage.As it is, we have to buy our parts online cause the local all brands dealer marks everything up so much.Lots of small dealers keep their customers happier!!
The thread goes into more detail on this, but I’ll try to adress it quickly… The issue is that Piaggio tracks their growth by how many units they ship to dealers, without regard to longevity or consumer satisfaction. Adding dealers (and shipping them their requisite shipments) is an easy way to inflate growth, but it’s not sustanable. It IS good to get some more dealers out there in underserved areas, and some of those will prosper, but some rural/suburban dealers are farm stores or hardware stores and they won’t last, lacking good parts support from Piaggio and a well-trained service and sales staff. Motorcycle and scooter shops picking up the Piaggio line will do better, and Piaggio should have been targeting them all along isntead of throwing money at boutiques, but again, Dealers used to working with Honda and Yamaha will be very disappointed with Piaggio’s policies and parts supply-line. Some just want Vespas in their store to bring in customers (the name brings people in) to drive them towards cheaper scooters with a higher profit margin.
As far as discounting and pricing, Piaggio’s MSRPs aren’t very flexible, and there’s not much profit margin, so I dont’ expect competition will affect pricing, other than crashing-and-burning dealerships trying to unload bikes quickly. Competition may drive dealers to improve service, but again, some of that is at the mercy of Piaggio’s training and parts supply, so if Piaggio doesn’t support the shop, they’ll have a hard time providing good service. As it is, many dealers order Piaggio parts from overseas third-party sources because Piaggio is so slow and expensive.
I agree that in principle, smaller, scooter-specific shops are usually your best bet, but I’ve seen a growing number of suburban/rural strip-mall stores selling third-and fourth-rate scooters often with no dealer license and no service department. I can’t imagine Piaggio is dealing with shops like that yet, but at some point, to keep “growing” (unloading scooters) they’re going to lower their standards yet again.
Quoted from Bowspirit: “More dealers means better prices, more convienent dealers and service. Dealers will have to try harder to keep thier customers happy, thats not a bad thing.”
See, here is the problem with the above statement. Piaggio has very tight margins on the pricing as it is,and they arent going to change that when adding another dealer in a particular area. All this does is make an already tight margin business nearly impossible to make profitable. In this scenario the dealer either has to diversify and sell other brands (and will probably beless likely to lower prices since other lines can support the overhead) or go out of business, in which case consumers are back to square one. Until Piaggio becomes more flexible, and creates larger margins for the dealers (which isnt going to happen with the way the Euro is gaining strength) they will in the long run do a dis-service to the consumer and the dealer network
exactly, monza. Piaggio’s customer is the dealer, they make money by selling scooters, accessories, store fixtures, parts, and apparel to the dealerships (and via financing, which is a whole ‘nother story). Adding dealers makes them more money, but again, it’s just not sustainable without a wide consumer base demanding their product (especially in the proportions that they deliver product to the dealers). Adding dealers doesn’t add consumers, especially when Piaggio is doing very little national marketing. The exposure and competition may help a little, but not nearly enough to compensate. There aren’t any checks and balances other than market forces, and market forces will kill them eventually for overexpanding. Some dealers know what they’re getting into and they’ll be OK in the long run because of good planning and knowing the market, others are in it for quick cash just like Piaggio, and they will probably suffer their same fate.