Piaggio '07: Focus on Service

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Piaggio Group Americas (PGA) had three major goals in 2006 — to improve infrastructure and service capabilities, enrich product offering, and enlarge its distribution network.

PGA president Paolo Timoni says the company "made very good progress on all fronts" by 1) installing a new ITtool to better forecast demand for spare parts and accessories; 2) hiring more technical support representatives; 3) launching several new Moto Guzzi, Aprilia, Piaggio and Vespa models; and 4) expanding its dealer network to 302 locations.

However, acknowledging continued shortcomings in PGA's distribution system, Timoni says much work remains.

"When you compare us to our competitors it's clear that we're still in our infancy in terms of developing a fully functioning distribution network with national coverage,"Timoni tells Dealernews. "Thus, in line with what we did last year, in 2007 we will continue to hire new people for dealer support, listen to our dealers and customers and invest in service and communications, work with Italy to improve our supply chain performance, and provide additional incentives to get potential customers to visit our dealerships and demo ride our products."

While he declines to offer specific sales figures, Timoni said Piaggio/Vespa sales in 2006 were up 14 percent from 2005, Moto Guzzi sales were flat and Aprilia recorded a minor decrease.

PGA ended 2006 with 184 Piaggio/Vespa dealers, up from 95 in 2005; 99 Moto Guzzi dealers, up from 76; and 122 Aprilia locations, down from 128. Aprilia experienced the greatest swing in dealer numbers. While 41 new Aprilia dealerships were added in 2006, 47 were lost.

PGAVP of marketing Mike Kull says many of those 47 Aprilia dealers were legacy dealers from Aprilia World Services that had not placed orders in years. "Taking them out of the network was a necessary part of the dealer-development process."

So who is the perfect PGA dealer? Timoni says it varies market to market, but the core values are entrepreneurship and management and operational expertise.

"For Aprilia and Moto Guzzi, we look for dealers who understand that these are premium brands that will produce results over a five-year scenario. For Piaggio/Vespa, we look for dealers who are passionate about alternative transportation solutions."

Challenges

PGA leadership feels the greatest ongoing challenge for the company has been the restoration of proper service to Aprilia and Moto Guzzi dealers.

"For Aprilia and Moto Guzzi dealers, they still had too many service issues," Timoni says. "[Dealers] want us to improve our service level and communicate more." The objective in 2007 is to fill 95 percent of orders within 15 days for all brands.

PGA recently partnered with a number of new companies to help improve the OEM's relationship with its dealers.

Kull says Advertising Checking Bureau has been tapped to process co-op claims. Avala will maintain a Website where dealers can create co-op ads using pre-approved artwork. Powersports Network will provide Websites for dealers. Finally, Sparta will provide retail financing alongside GE Finance.

Another initiative designed to instill dealer confidence in PGA's abilities is the Guarantee Ride program. Effective on all Aprilia and Moto Guzzi streetbikes bought between Jan. 1 and Dec. 31, 2007, the program provides loaner bikes to owners who do not receive warranty parts in less than 15 calendar days.

For 2007, the OEM will ship the Piaggio MP3 and Fly 50, the Vespa LXV and GTV, the Guzzi 1200 Sport, and a new 750cc naked Aprilia alongside a revamped scooter lineup.

Aprilia's product awareness efforts include a return to flat-track racing, expansion of its supermoto team, sponsorship in the new long-distance Moto ST series, and a new contingency program.

"While we are still short of meeting dealers' expectations, Iam very confident that all the hard work completed in 2006 will become very visible and appreciated in 2007," says Timoni.