Italian auto major Piaggio plans to make the engine manufacturing facility at the Baramati plant the global hub for sourcing powertrains.

Italian auto major Piaggio plans to make the engine manufacturing facility at the Baramati plant the global hub for sourcing powertrains, reports The Economic Times. Piaggio’s fully-owned Indian subsidiary Piaggio Vehicles (PVPL) is the market leader in the three-wheeler segment.

Piaggio is investing Rs 450 crore in the engine facility and will develop twin cylinder turbo-charged diesel engines of up to 1.2 litre in technical collaboration with Japanese major Daihatsu Motors. The euro IV and V compatible engines will be used for the new-generation mini-trucks that Piaggio plans to launch in India. The facility will have a scaleable capacity of 50,000 engines in the initial phase, which will also be used for exports to Piaggio’s global centres.

PVPL’s CMD Ravi Chopra told ET, “We are bullish on the Indian market. We are already the market leader in three wheelers and have a sizeable presence in smaller trucks. The new generation engines will help introduce our new platforms in the domestic and export markets. We are planning to make trucks with a payload of 1-tonne and launch new vehicles fitted with fuel efficient engines.”

PVPL has also entered into an agreement with Greaves Cotton wherein the latter will supply GL 400 and GL 435 mono-cylinder diesel engines for Piaggio’s three-wheeler range. It already sources engines from German engine maker Kohler Group, which supplies the 482-cc liquid cooled diesel engines for its sub-one tonner, Ape Truk.

“We are in the process of developing different powertrains for our new vehicles. We are developing low-cost fully customised new truck for the export market. It will sport the new series of engines currently under development and help us tap the overseas markets,” Chopra said.

Piaggio has a market share of 47% in the three wheeler market. It had sold 40,000 vehicles of the total 85,409 three wheelers in the April-June quarter. It also exports to South Africa, Argentina, Mexico, Peru and neighbouring Sri Lanka and Bangladesh.

PVPL is also conducting a feasibility report to enter the two-wheeler segment. The company has announced its intentions to launch scooters from its global platform by 2010. Piaggio chairman and CEO Roberto Colaninno had announced earlier this year that the company will re-enter the scooter market with its famed Vespa range of scooters.

Report courtesy of The Economic Times