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Piaggio bids for Scooters India

Italian two-wheeler giant Piaggio, maker of the famous Vespa scooter, said on Friday that it had put in a bid to acquire a majority stake in India's largest state-run scooter firm.

Philomina Konikara, spokeswoman for Piaggio, said the acquisition of the profit-making Scooters India would allow the Italian firm to increase capacity overnight as well as its share in a competitive market.

"We want to increase the base of our operations in India. We plan to invest $ 50 million over an unspecified period of time to grow our business in this region," said Konikara.

Meanwhile, Scooters India said it would reveal Piaggio's bid price "in a day or two" so that other prospective bidders could have the option of matching or increasing the offer.

Scooters India earlier sounded out Japanese car and motorcycle maker Suzuki which has not put in a bid so far.

The state-run firm notched up sales turnover of $ 1.4 in the fiscal year ending March 2000.

Japan's Honda Motor Company Limited, which is setting up a scooter subsidiary near New Delhi, says the Indian market is attractive for foreign manufacturers.

"Sales in India's two-wheeler market which totalled 3,250,000 units in 1998 increased to 3,500,000 in 1999," a Honda official said. "Scooter sales are likely to reach 4.5-5 million units soon," he said.

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