Piaggio is abandoning the seemingly passionate, creative, and reasonable (and privately-owned) Canadian Scooter Corporation to establish a Canadian Piaggio subsidary, because short-term greed, total unfamiliarity with a market, and unsustainable dealer inflation is working so well for them here in the U.S. The “effective immediately, wait, no actually, effective a month ago” nature of the press release makes it clear that this was a decision that was carefully planned well in advance with CSC’s blessing and assistance, and that the transition will be entirely smooth and trouble free for dealers and customers. Sigh. (Thanks, Scooterism)
UPDATE: A source tells me that CSC brought the change on themselves, see the comments.
4 thoughts on “Piaggio shutters Canadian Scooter Corp.”
Stunning. Your spin on the story is absolutely right on.
Apparently there is more to the story, and CSC is largely to blame, according to a source I talked to yesterday.
The source says CSC ran their own dealerships AND supplied typical third-party dealers. That sounds like a recipe for disaster, and apparently, it was, with CSC supplying their own dealers with first pick of the most popular bikes, parts, and accessories, and leaving third-party dealers in the cold with the leftovers.
CSC’s contract (again, this is just what I’m hearing, but the source is reliable) ended in the summer and Piaggio asked them to shape up or the contract would not be renewed. CSC continued their practices and were notified they were losing the contract. They declined to make the announcement, so it was left to Piaggio to announce the change.
CSC responded by trying to sell off their remaining inventory at a discount via http://vespasale.ca (which has been unavailable since I’ve been checking it). Canadian Dealers facing the slow end of a bad sales year were surely not thrilled to see their old distributor selling off bikes (some of which they were told were unavailable) to the public at a discount.
So I stand by my forecast of Piaggio’s future success in the Canadian market, but it was unfair to assume CSC had their act together just because they had pretty ads and a charismatic frontman.
The more I think about this, though, (and this is entirely speculation) the more I wonder if CSC’s original business plan was to ONLY support a sustainable solid core of in-house dealers from the start, and Piaggio pressured them into adding independent dealers in remote locations to boost raw “sales*” numbers (as PiaggioUSA has done). This seems like the sort of bad decision Piaggio could force a distributor into, in which case CWC would OF COURSE support their own network at the expense of secondary dealers. I don’t have much insight into CSC’s history or organization, but that seems like an entirely plausible scenario.
*PIaggio counts ‘sales’ as ‘bikes shipped to dealers,’ not ‘bikes bought by customers,’ so adding dealers increases sales, even if the dealer never sells a bike.
Did you know that PGA (Piaggio Group America) also resumed control from their South America distributor at the same time? (early Nov.) Interesting fact that has been quietly buried.
Also CSC selling bikes to the public at a discount sure won’t make the dealers happy, BUT, Piaggio won’t take them back, plus Piaggio Group America set the Canadian MSRP THEMSELVES which everyone knows is ridiculously over priced in Canada. This is partly why all the dealer have excess stock, bad pricing and Piaggio forcing product upon them. So the dealers won’t take the bikes, Piaggio won’t buy them back, are CSC supposed to burn them in the parking lot?
CSC has 3 stores (one is about a year old) their commitments to Piaggio USA surely included much needed sales from their over 70 Canadian dealers. I’m sure they weren’t planning on running a distributorship simply for the tiny sums of money that 3 stores bring in. The 70 dealers brought CSC many times the revenue the 3 stores did so that part of your sources info just doesn’t add up. But it’s probably a dealer who is the source and they have a tendency to view these things from a dealer level. This I’m sure was a big picture fight based on long term sustainability, not a move made because some dealer in Saskatoon though that a dealer in Toronto got first dibs on a much sought after “left hand mirror” or “red horn cover”. Piaggio doesn’t think like that. They think about can we take Canada from 1700 units to 2200 in the next year.
As far as bringing the change upon themselves: how about Piaggio Group USA asking CSC for a increase in their orders. CSC replying their dealers aren’t buying. EVERYONE has excess stock, CSC asking for lower pricing to help move inventory and relieve dealer strain, Piaggio saying no, to lower pricing, CSC digging their heels in knowing the Canadian market can’t bear a $4500 LX50. Piaggio USA saying it will and to prove it they’ll just do it themselves.
Just a theory.
Comments are closed.