Piaggio urged to set up Malaysian assembly line

The Piaggio Group, Europe's largest motorcycle company, should consider assembling some of its motorcycles and scooters here in Malaysia, a deputy minister said.

Datuk Mukhriz Mahathir, International Trade and Industry deputy minister, said the Italian company could also outsource from Malaysia certain components for its scooter factory in Vietnam.

Mukhriz said Piaggio can further tap the local strength and experience by making the Naza group its joint venture partner in developing certain products for the domestic and international markets.

He suggested this at the signing of a distributorship agreement between Piaggio and Naza in Kuala Lumpur yesterday.

Naza will be the exclusive local distributor of four brands under the Piaggio group - Aprilia, Vespa, Gilera and Piaggio.

The group also has the option to distribute three other Piaggio brands namely Moto Guzi, Derbi and Scarabeo.

Piaggio, the world's second largest motorcycle company, opened the Vietnam facility last year, its first plant outside Italy to produce Vespa scooters.

The factory is capable of producing 100,000 units of Vespa per year. Overall, the Piaggio group can produce more than 600,000 units of motorcycles and scooters.

Mukhriz said Naza can impress Piaggio of the infrastructure and support from the government and related industries for the development of automotive industry.

"This will not only expand Naza's presence in the motorcycle segment, but also encourage and promote the development of local motorcycle parts and components manufacturers," he added.

Mukhriz said that although European brands such as Aprilia, Vespa and Gilera have a healthy presence in the local market, their share is still small compared with the Japanese brands.

Honda accounted for 46.5 per cent of the total motorcycle and scooter industry sales of 432,681 units last year, followed by Yamaha with a 38.7 per cent share.

Rounding up the top four were Suzuki (4.2 per cent) and Kawasaki (0.5 per cent). Motorcycles under the Naza brand were very distant at 0.25 per cent of the total sales volume in 2009.

More than 80 per cent of the motorcycles and scooters sold here are those of 150cc and below and are assembled locally.