"Premium satisfaction comes from a price tag which is high", says Ravi Chopra of Vespa
An interview with Ravi Chopra, Chairman & Managing Director of Piaggio Vehicles Pvt. Ltd.
Ravi Chopra, chairman and managing director of PVPL
Do you plan to bring out large volumes? Given that your numbers are currently very low, can you tell us how you are able to recover your investment with such low volumes?
Every organization has its business model and strategy. Our strategy is loud and clear premium product, premium pricing. We want to bring the entire Vespa brand to India progressively so that the offerings which are made to the Indian customer are as good and similar to the offerings made in Europe, which means he has the same choice which the European customer has in Europe. That is the immediate objective.
Have you set any kind of timeline to bring all those products here?
Indefinite... it goes on. We keep on enlarging our brand. We keep on enlarging our segment. Today we have created the premium segment.
So you will guard the "premiumness"?
Absolutely. Our immediate plan is to bring the Vespa world to India. Therefore we would like to continue our efforts to position our products in the premium segment.
Don't you think the scooters are priced a bit too high?
Pricing is not high: pricing is a secondary factor, the positioning is important when you have a premium product. A premium product means meeting the notional as well as aspirational requirements of customers. Premium satisfaction comes from a price tag which is high.
India is a price sensitive market, volumes will come only if you tone the price down...
If somebody wants a cheap product: we don't make them. We make expensive products. Someone who wants a cheap product has other choices. The Vespa is not for people who want a cheap product.
If you sell more vehicles then you will have more visibility, which will help in branding also...
I agree with you. But it will take time. Today the second product has come, now the third and fourth will come.
When will we see the next one?
You might see the next product by the end of this year.
Will the new product be priced higher than the VX or on the lower side?
It isn't lower or higher. It is meeting the requirements of the customer. What we are doing is we are trying to offer different products for different consumer profiles. Different customers have different needs. Some want something sporty, others want something fashionable, yet others want something else altogether.
The demand in the commuter segment is very high. Are you targeting it?
I would like to tell you that people who only want commuting and not the pride of ownership are not our customers. Our customer is a guy with the aspiration to own something unique, something which has value and heritage.
So the first model launched last year will be the one with the lowest price tag?
Not necessarily. The point I am trying to make is not about going down or up in the price spectrum. The point is that we will remain in the premium segment.
What market size do you estimate for premium scooters in India?
Like I said, this is a "sleeping" population. We have to awaken these people so that they meet their aspirations. Today they don't have a product to meet them in their aspirations.
What kind of market size will you be able to develop in due course?
Kuch to hamari confidence hoti hai na (Our confidence in ourselves counts, right)? We know what we are doing. If we can have best-selling products in Europe and USA, why not here?
What kind of market size do you have in markets similar to India's?
Our annual capacity in India today is 1.5 lakh units yearly. We have created this capacity only because we were more than confident that we will be utilizing it and will be forced to increase it further.
When do you think you will require expansion?
No time limits.
This interview was conducted on 4 June 2013 by Nabeel A Khan of Automonitor.