Piaggio, Europe’s leading manufacturer of two-wheeler and three-wheeler motor vehicles.
Piaggio Group operates globally in two markets in the light mobility vehicle industry:
- two-wheeled vehicles (consisting of scooters and motorcycles);
- and commercial vehicles (both three- and four-wheeled light commercial vehicles).
Piaggio Group is the leading European manufacturer of two-wheeled vehicles and one of the leading producers of three-wheeled vehicles in India.
The macroeconomic framework
During 2020, the global economy was strongly affected by the COVID-19 pandemic, albeit in a much more geographically heterogeneous manner than during the initial phase of the epidemic. Economists estimated world GDP to fall by 4.1% (+4.3% in 2021 according to the OECD), up slightly from the IMF forecast at the beginning of September (-4.8%). The easing of restrictive measures introduced to counter the spread of the virus led to a partial recovery of economic activity in Europe and North America, which was hampered by the number of infections picking up in the autumn, while Asia, blocked by health measures at the beginning of the year, recorded a strong recovery at the end of 2020.
The US economy was impacted considerably by the effects of the outgoing president’s management of political and health matters. GDP stood at -3.4%, with a forecast of +3.5% for 2021; the third wave of the pandemic badly affected a relatively favourable economic scenario up until October, characterised by increased manufacturing and services, a continued growth in consumption, extraordinarily expansionary economic policies and record levels of savings. On the currency market, the euro appreciated significantly against the dollar, a direct consequence of the collapse in yield differentials following the Fed’s rate cuts.
In the East, the pandemic contributed to worsening the growth of the Japanese economy, following the negative trend already seen in the last quarter of 2019. The year ended with GDP at -5.5%, while in 2021 growth is expected at 3.4%, with the prospect of a moderate start due to the new wave of contagions, followed by a re-acceleration mainly due to the contribution of fiscal policy and the gradual deployment of vaccines.
China is the only major economic power with positive growth (+2.3%); thanks to an effective control of the epidemic and the support of fiscal and monetary policy, the economic recovery was faster than expected, driven by real estate and infrastructure investments, as well as by exports and positive industrial growth. Estimates for 2021 are on the upside, with GDP expected to grow by around 8.0%.
In India, the slowdown in the number of infections and the relaxation of measures to contain the pandemic have led to the pace of GDP contraction decelerating from -23.9% in the first half of the year to -8.0% at the end of 2020.
The recovery was driven by agriculture, manufacturing and energy, water and gas production. In recent months, production has increased but services have shrunk, while exports have exceeded imports net of oil and precious metals; sales of cars and two-wheelers rose in double figures and the outlook for consumption remains positive, although moderate. The Indian government earmarked 1.4% of GDP for small businesses and poor households through a fiscal package. This support is expected to foster a re-acceleration of growth in 2021, forecast at 8.3%.
The Eurozone‘s GDP declined by 7.3%, following a strong rebound in the third quarter, thanks to the contribution from private consumption and fixed investment. The increase in the proportion of the population immunised thanks to the vaccination campaign should avoid new restrictions, paving the way for a more stable recovery at the same time as the ECB has extended three of its stimulus programmes, including the PEPP (Pandemic Emergency Purchase Programme) from EUR 1,350 billion to EUR 1,850 billion, with the duration of net purchases extended until March 2022.
The above conditions led to a growth forecast of 4.5% in 2021.
At the end of 2020, the UK finalised its Brexit deal with the EU; it will leave the Single Market and the customs union as of 1 January; specifically, restrictions on the mobility of the population will increase, while the UK government will have full freedom to implement trade agreements with non-EU countries.
The Italian economy was severely affected by the extent of the restrictions, causing a significant contraction in GDP, albeit less marked than during the first wave of the contagion. Household consumption fell slightly more than output in 2020, affected by the contraction in employment and income (albeit mitigated by support measures), restrictions on mobility and the withdrawal of some types of expenditure due to fears of contagion. Monetary and financial conditions remain extremely favourable in this scenario, also thanks to the actions of the Eurosystem, governments and European institutions; the growth in international trade continued also at the end of the year, benefiting from the recovery of the industrial sector in all countries. Economists estimate that output, which was still weak at the beginning of the year, will return to significant growth from the spring onwards, coinciding with an assumed improvement in the health situation. After the 9.0% contraction in 2020, GDP would expand by 4.4% in 2021 and 2.7% in 2022.
Currently available figures for monitored markets, and specifically the performance of the two-wheeler segment (scooters and motorcycles) are reported below.
India, the most important two-wheeler market, reported a significant decrease in 2020, closing with less than 14.3 million vehicles sold, down by 23.2% compared to 2019.
The People’s Republic of China continued to decline (-9.9%), closing at just under 5.9 million units sold.
The Asian area, termed Asean 5, reported a downturn in 2020 (-30.1% compared to 2019) ending the period with nearly 9.6 million units sold. This decrease was due to:
- Indonesia, the area’s main market, (-43.5% compared to 2019 and sales of less than 3.7 million units);
- Thailand (-12.3% compared to 2019 and 1.5 million units sold);
- Malaysia, (-8.9% compared to the previous year and over 498 thousand units sold);
- Vietnam (-16.7% compared to 2019 and 2.7 million units sold);
- the Philippines (-29.3% compared to 2019 and 1.2 million units sold).
Volumes of other Asian area countries (Singapore, Hong Kong, South Korea, Japan, Taiwan, New Zealand and Australia) increased slightly in overall terms, compared to the previous year, with around 1.58 million units sold (+21.5%). In particular, the Taiwanese market showed a strong turnaround compared to the previous year, increasing to around 939 thousand units sold (+33.2% compared to 2019). Japan, remaining broadly stable, reached almost 366 thousand units sold (+0.9% compared to 2019).
The North American market reported an increase (+11.3%) compared to 2019 (578,916 vehicles sold in 2020).
Brazil, the leading market in South America, reversed the positive trend and, with a decrease in sales (-16.3%), closed at almost 933 million vehicles sold in 2020.
Europe, the reference area for Piaggio Group activities, performed well in 2020, with an overall increase of 5.1% in sales compared to 2019 (+5.5% for the motorcycle segment and +4.6% for scooters), ending the period with approximately 1.454 million units sold.
The scooter market
The European scooter market in 2020 accounted for 721,000 registered vehicles, with sales up by 4.6% compared to 2019.
In 2020, the North American market showed a turnaround with an increase of 8.2% and 27,344 units sold:
The main scooter market in the Asean 5 area is Indonesia, with over 2.9 million items sold, reporting a decrease of 52.8% compared to 2019. The automatic scooter segment reported a considerable decline in 2020 (-52.3% compared to 2019, with nearly 2.7 million units sold). The gearbox (cub) segment also fell sharply in 2020, closing with -59.3% and 187 thousand units sold.
The automatic scooter market, after last year’s decrease, recorded an even sharper decline, -28.0% in 2020, closing at 4.28 million units. The 125cc segment was the best performer, with over 4.13 million units sold in 2020, accounting for 98.3% of the total automatic scooter market. There was a sharp drop in the 150cc segment (-84.8%), no longer linked solely to sales of the Aprilia SR 150 scooter, which closed at 386 units in 2020, but also to the Vespa, which closed at 2,861 units (-53.3% compared to 2019). The 50cc scooter segment is not operative in India.
The motorcycle market
With approximately 734,000 units registered, the motorcycle market ended 2020 with a 5.5% increase. The 50cc segment also performed well (+20.8%) closing with 46,661 units sold. The increase in the over 50cc segment, on the other hand, was more moderate, with 687,136 units sold (+4.6%).
The motorcycle market in North America (USA and Canada) recorded an increase in 2020 (+11.5%), closing the period with 551,572 units compared to 494,702 the previous year.
The most important motorbike market in Asia is India, which in 2020, continuing the trend of the previous year, registered approximately 9.5 million units with a percentage decrease of 21.3%. The motorcycle market in the Asean 5 area is far less important than the scooter sector. sales of motorcycles in Vietnam were not significant. In other countries, the highest sales were recorded in Indonesia; however, with 184 thousand units sold it reported a decrease of 50.8% compared to the previous year.
In 2020, the European market (including the UK) for light commercial vehicles (gross vehicle weight less than or equal to 3.5 tons), in which the Piaggio Group operates, decreased by 18.0%% compared to 2019, with 1,732,084 units sold (source: ACEA data). In detail, the trends of main European reference markets are as follows: Spain (-26.5%), UK (-20.0%), France (-16.1%), Italy (-15.0%) and Germany (-12.2%).
The Indian three-wheeler and LCV cargo market (the latter with vehicles that have a mass below 2 tonnes), on which Piaggio Vehicles Privates Limited - the Piaggio & C. S.p.A. subsidiary - operates, reported the following trends: