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