Piaggio and the
Zongshen Group, one of China's largest private engine
and motorbike manufacturers.
Saturday 25 June marked the official production
start-up, with a ceremony attended by Piaggio
Group chairman Roberto Colaninno, chief
executive officer Rocco Sabelli and chief
operating officer Gianclaudio Neri, of the "Shuni"
scooter (Chinese for elegance) developed with
Piaggio technologies and patents, at the
production plant of Piaggio Foshan Motorcycle,
the joint venture formed last year by Piaggio
and the Zongshen Group, one of China's largest
private engine and motorbike manufacturers. The
two partners have equal shares in the venture
(45%-45%), while the remaining 10% is held by
the Foshan Municipal Authority.
The mass production
start-up coincided with the market launch of the
Shuni, also held in Foshan and attended, in
addition to the senior management of the two
groups, by the joint venture's top dealers.
commissioned for production by the Piaggio
Foshan Motorcycle Company in a record 10 months,
the Zongshen Piaggio Shuni is a modern 50cc
scooter based on the Zip project, one of
Piaggio's greatest success stories. The Shuni's
four-stroke engine is produced under licence
from Piaggio at the Zongshen engine plant in
Chongqing, with an annual production capacity of
more than 4 million units, and is one of the few
engines on the Chinese market that complies with
Europe's current emissions standards, Euro 2,
which were adopted by China this year.
Piaggio Motorcycle production facility in Foshan
currently has a workforce of more than 400,
which will rise to 1,000-1,100 to support
production schedules envisaging output of around
10-15,000 machines this year, and an annual
overall target of approximately 300,000 vehicles
within the next two-three years, as the scooter
and motorbike ranges are extended with 50, 100
and 125cc models.
The agreement with
the Zongshen Group gives Piaggio a bridgehead
for expansion in China (the world's fastest
growing market for motorised two-wheel vehicles,
with annual demand of more than 17 million
units) and south-east Asia. Further
opportunities could arise on the three- and
four-wheel markets, which in China alone
represent an estimated 1.5 million and 800,000
vehicles a year respectively.
At the Shuni
scooter launch, Piaggio Group chairman Roberto
Colaninno said: "The Piaggio Group is
financially sound and its debt is decreasing, in
part thanks to its ability to generate cash. If
the turnaround continues to gather speed, not
just at Piaggio, but also at Aprilia and Moto
Guzzi, which we purchased at the end of last
year, IMMSI will not oppose proposals to bring
forward a Piaggio IPO to 2006, if the other
shareholders are in agreement."
Commenting on Group
performance in the first five months of 2005,
chief executive officer Rocco Sabelli stressed
"the 6-7% year-on-year increase in Piaggio Group
net sales in the January - May period, with
particularly strong growth in May. This trend,
which we expect to continue in the June figures,
reflects improved performance on the Italian
two-wheel market, progress in Spain, the USA and
India, and the recovery at Aprilia, especially
in scooters, and Moto Guzzi."
As far as
profitability is concerned, Sabelli said, "the
Group expects to report a significant Ebitda
improvement for the half-year and is already
targeting consolidated break-even for full-year
2005, in part thanks to the collection a few
days ago of the eco-incentives previously
advanced by Piaggio and Aprilia, for 18.5
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