Vespa motor scooters drive back into the Thai market

By Mick Elmore Apr 21, 2010, 11:20 GMT

Bangkok - Vespas, the age-old Italian motor scooters, are a common sight and sound in Bangkok's Chinatown as the favoured delivery vehicle. Throughout the day there is a constant stream of them moving in and out of the labyrinth of small lanes and carrying textiles and other goods to all points of vast greater Bangkok.

Their low putt-putt-putt identifies them a block away, if it can be heard over the cacophony of other street noises. Their distinct shape is a favourite of many, with Bangkok home to several Vespa clubs.

Most of the Vespas plying Bangkok's streets are old two-stroke models, many dating back to the 1960s, a few further than that. New Vespas have not hit the streets in 15 years. But that is about to change with four partners opening the first Thai Vespa dealership in over a decade.

Vespiario drove Vespas back onto the scene at the recent Bangkok International Motor Show with more than 220 prospective buyers paying deposits on new four-stroke Vespa motor scooters, a good way toward their goal of selling 2,000 in their first year.

Vespiario is looking at a niche market made up mostly of young professionals living in the cities. Their aim is to push the brand as globally trendy and fashionable like in Europe.

They say they like the dependability the old two-stroke Chinatown Vespas represent, but the new quieter four-stroke models will be marketed toward the cosmopolitan people.

After launching in Bangkok, plans are to open a distributor in Thailand's northern capital Chiang Mai, and they were looking at other Thai cities with big middle classes, such as Phuket, Korat and Pattaya.

'Thailand sells about 1.6 million motorcycles a year. We're just looking at a small part of that,' Vespiario Managing Director Pornada 'Mai' Nivatvongs told the German Press Agency dpa.

'People already know Vespa. There are already Vespa clubs in Bangkok,' she said.

Mai and three friends invested a total 20 million baht (about 615,000 US dollars) to set up Vespiario (Thailand) Co., Ltd. and are selling four models between 150 cc and 300 cc; the LX150, GTV250, GTS250, and GTS300 Super.

The key bike is the LX150, which is manufactured near Hanoi in Vietnam, and because of AFTA (the ASEAN Free Trade Area), the opening price is 99,000 baht (about 3,000 dollars).

But, said Mai, that is a 'get things started' price and will have to go up.

The other three models are made in Italy with the cheapest selling for B285,000 (8,800 dollars), the higher price much due to a 60 per cent import duty on all imported bikes.

Honda, which commands nearly 70 per cent of the Thai motorcycle market, faces no such problem because their bikes are made in Thailand.

The vast majority of their sales are the less expensive bikes starting in the mid-40,000 baht (1,240 dollars) range, said Jutamart Inpringkanan, public relations with A.P. Honda Co. Ltd. in Bangkok.

'They are manufactured here with 95-plus per cent local parts. That keeps the price down,' she said.

They have bikes as small as 50 cc but it's the 110 cc Honda Wave that has virtually flooded into market.

Numbers for newly registered motorcycles in Thailand for January 2010 showed Honda sold 110,731 units, Yamaha 34,570 units, Suzuki 4,803 units, Kawasaki 1,798 units and Tiger 1,109 units.

The big bikes like Harley Davidson, Triumph, BMW, and the larger Hondas and Kawasakis sell in the hundreds per year, not thousands.

Honda has no plans to abandon their best selling small bikes, but with the 125 cc PCX that sells for about 75,000 baht (2,320 dollars), they are inching into the medium market, too.

'It is for higher-income people. People who want a second family car,' said Jutamart about the PCX.

That is near the niche market Vespiario has its eyes on, but not quite, the company's Ryan Brown told dpa. 'We are looking at the premier scooter market. Everything about it is premium, I don't see any direct competition,' he said.

Ryan added there is no one reason Vespas disappeared from the market, but Vespiario is banking now is the time to return.

Small bikes have proved a favourite for generations in Thailand with their low purchase price and stingy use of petrol keeping them popular. Their size is increasing with the economy, though, and a market for medium sized bikes is growing.

But no matter the type, motorcycles are well suited for Thailand where you might get wet and may sweat, but there are no winters forcing motorbikes to sit idle in a garage for several months a year.

They are also often the quickest way to manoeuvre in Bangkok's near gridlock traffic. Motorcycle taxis do a roaring business in the capital where they are often the fastest way to get somewhere and cost less than taxis and tuk tuks, the locally-made motorized - and noisy - three-wheeled taxis.

Some estimates are as high as 100,000 motorcycle taxis working at more than 1,800 motorcycle queues in Bangkok.

Motorcycle sales are projected to increase about 5 per cent this year to some 1.68 million motorbikes in the country of just over 60 million people.

With sales like that there might be room for everybody and, as Vespiario people say, certainly for their medium range scooters.