Piaggio Group Worldwide Profits Plunged in 2013

It’s no secret that the automotive and powersports sectors have been hit especially hard during The Great Recession of the past few years, but it’s not always easy to get a full picture of just how hard they’ve been hit. Well Yahoo! News is reporting that Piaggio’s 2013 financials show a 57% decline in profits over the year before. That drop in profit is driven by a number of factors, but most significantly by a lack of sales and fluctuations in worldwide currency values.

From Yahoo! News:

Consolidated net sales dropped to 1.21 billion euros from 1.41 billion euros, in line with analyst expectations. Currency effects, particular because of the weakness of the Indian rupee, had a negative effect worth 53 million euros, the company added.

Piaggio said European sales of two-wheelers had contracted for a sixth consecutive year and in key markets Spain and Italy had fallen 70 percent since 2007. Sales in that segment also fell in double-digits in Vietnam and Thailand, the group added.

Yet all is not so bad as this sounds. First of all, while Piaggio Group profits are down over the sales booms of 2007 and 2008, the company is still profitable which is not something all companies can claim these days. Secondly, this decline in revenue and profit was inline with expectations set by Piaggio group and market analysts. This is why despite the seemingly appalling news that profits fell by more than half, Piaggio’s stock on the European markets was actually up by 1%.

With new tech, new models and lots of brand buzz around Vespa in particular, it’s comforting for Vespa fans to know that the financial challenges currently facing Piaggio Group aren’t exactly sneaking up on them. One might be so hopeful as to say that the new technology like the 3V engines, and new models like the BV350, 946, Primavera and Sprint are actually indicators that Piaggio Group is moving forward with a strategy for long-term sustainability. Whether that strategy pays off is something the numbers will bear out in coming years.

Source: Yahoo! News

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  • Eliah Thepatriot

    In their report, Piaggio claim they regularly “ship” 500,000 units to the the North American market. That’s a lot of units! That number makes me very uneasy because I simply do not believe that Piaggio is going to sell 500,000 units in the USA and Canada this year. Lots of scooter dealerships have closed and continue to close on an ongoing basis. Suppose a hypothetical Piaggio dealer in place with a ideal weather, is selling 3 bikes a day, 5 days a week, 52 weeks a year. That’s still only 780 units a year. It would take 641 of those theoretical dealerships running wide open year-round to sell 500,000 units per years. Looking at the Piaggio Dealer Finders for the United States and Canada, I count the dealerships as follows: In the United States there are 3 in Alabama, 1 in Alaska, 4 in Arizona, 1 in Arkansas, 23 in California, 6 in Colorado, 3 in Connecticut, 0 in Delaware, 17 in Florida, 3 in Georgia (didn’t one of those just close?), 2 in Hawaii, 0 in Idaho, 3 in Illinois, 4 in Indiana, 1 in Iowa, 2 in Kansas, 2 in Kentucky, 2 in Louisiana, 2 in Maine, 4 in Maryland, 3 in Massachusetts, 5 in Michigan, 3 in Minnesota, 0 in Mississippi, 2 in Missouri, 1 in Montana, 1 in Nebraska, 2 in Nevada, 2 in New Hampshire, 4 in New Jersey, 2 in New Mexico, 9 in New York, 3 in North Carolina, 0 in North Dakota, 9 in Ohio, 1 in Oklahoma, 3 in Oregon, 12 in Pennsylvania, 1 in Rhode Island, 1 in South Carolina, 1 in South Dakota, 2 in Tennessee, 10 in Texas, 2 in Utah, 1 in Vermont, 5 in Virginia, 6 in Washington, 0 in West Virginia, 6 in Wisconsin, and 0 in Wyoming. That makes a Sub total of 180 US dealers.

    In Canada there are 5 in Alberta, 4 in British Columbia, 1 in Manitoba, 1 in Newfoundland and Labrador, 1 in Nova Scotia, 5 in Ontario, and 17 in Quebec. That makes a sub total: 34 Canadian dealers

    So, there are a Grand Total of 214 North American Dealers give or take a few that may have closed or opened since the Piaggio site was updated.

    Again, Piaggio claim in their report that they are shipping 500,000 units every year to the NA market. So, we can do a quick average. 500,000 units / 214 dealers = 2,336 units per dealer. Excluding Sundays and Mondays and 10 holidays per year, there are 50 5-day sales weeks in a year, making a total of 250 days that a dealer can be open selling scooters. That means that each dealer must average 2336 units / 250 days or about 9.3 units per day, 5 days per week, 50 weeks per year.

    Something is amiss. Maybe a decimal point got lost in translation from Italian to English? Maybe someone at Piaggio confused the word “unit” with the “parts” and they are counting the numbers of spare parts they are shipping as “units?”

    Something is wrong with the numbers because they simply do not add up.

    Thanks for reading!

    • Rin

      Wow lol

      • Samuel P. Morris

        Future Wall-Street analyst running a boiler room ponzi scheme.