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Aprilia and Piaggio Sign Agreement to Jointly Procure Components

The following is a press release from Aprilia concerning an agreement between Aprilia and Piaggio, the two largest motorcycle manufacturers in Europe (Piaggio manufacturers primarily scooters) concerning joint procurement of components and sharing of engine platforms (in the scooter segment). There are some similarities to the Suzuki/Kawasaki relationship, and this is the continuation of a consolidation trend in the motorcycle industry that is using the automobile industry, to some extent, as a model.

Aprilia S.p.A. and Piaggio & C. S.p.A., the two leading motorcycle manufacturers in Europe, traditionally competitors, announce an unprecedented cooperative agreement in their sector: the adoption of joint sourcing strategies for the purchase of direct and indirect materials, through a formal Joint Procurement initiative.

The agreement between Aprilia e Piaggio stems from the need of an innovative approach to face a more and more competitive and challenging market in terms of model offering and pricing. The two Companies decided to collaborate and adopt common sourcing strategies improving the efficiency of their purchasing and R&D processes, although preserving their independence as separate entities and continuing to compete on the market. Economic benefits are expected to be immediate, but the initiative will also bring forth further savings in the medium and long term.

Specifically, in the scooter segment, Aprilia and Piaggio will purchase together vehicle components and equipment, while adopting common engine platforms. Several indirect services, still to be defined, will be eventually included in the Joint Procurement agreement.

“The Joint Procurement between Aprilia and Piaggio is an important and innovative step – says Mr. Stefano Rosselli del Turco, Piaggio’s CEO – we will keep competing on the market, while our suppliers will perceive us as partners. We will thus enjoy significant cost reductions and increase our competitive position against Asian manufacturers”

According to Mr. Ivano Beggio, Aprilia’s Chairman , “Thanks to the synergies of a common sourcing strategy, our Companies will be able to redirect resources to the enhancement and support of our expansion plans.Collaboration is the way we choose to continue being competitors, first of all”.