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Is Vespa the Sex Siren of a Booming Global Scooter Market?

Stocks in this article: F GM HMC HOG

NEW YORK (TheStreet) -- As an investor, you always want to be searching for pockets of growth inside an industry, sector, or specific company. Actually, let me rephrase. As an investor, you always want to be searching for HIDDEN pockets of growth inside an industry, sector, or specific company. It's the hidden areas of growth that the market, aka investors not named you, may have overlooked in determining a company's real-time value (provided it's a public company).


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Of late, I have been focusing on stealth areas of growth in business, and bringing them to life via photos, videos, executive interviews, or a combination of all three. First, was a chat with General Motors (GM), where it became clear that there is an after-market parts boom related to its new muscle cars, in this case the latest Chevrolet Camaro. To grab a portion of that growth, General Motors has begun to offer dealer-backed aftermarket-type parts for the Camaro at point of purchase. That sure should add increments to the overall sales and profit lines of the company. Then I researched the exploding demand well underway in commercial vans from the likes of Mercedes, Ford (F) and Nissan. Although a small percentage of the auto market, any segment growing at a double-digit sales clip like commercial vans is beneficial to the public companies just mentioned.

Next up in this personal mission of mine: scooters. The scooter industry is growing at approximately 20% a year. From the migration of human beings back into urban settings and their associated need for a space-efficient commuting machine, to a single millennial seeking to actually own a hard asset with low maintenance costs, the themes fueling the scooter industry are strong and likely sustainable for years to come. Amid those themes, major two-wheel producers Yamaha, Suzuki, and Honda (HMC) have all sought to release new models that resemble the motorcycles their names are synonymous with, boasting aggressive styling in a foot-forward riding experience. Unfortunately, not one of those companies has the rich history or charm of Piaggio Group-owned Vespa. Bottom line is that Vespa, since its first release of the 98cc in 1946, has always been a scooter company, not a motorcycle company (Piaggio does own motorcycle brands, such as Moto Guzzi, that do battle with Harley Davidson (HOG) in certain categories) posing as a scooter company.

Vespa has been the stealth star in major Hollywood movies. For many, Vespas are a conversation piece, offering a person in a car a brief glimpse into the lives of those parked alongside. As Piaggio Group President and CEO of the Americas Miguel Martinez remarked to me at a dinner for the launch of the two newest Vespas, the Sprint and Primavera, "You have to have passion to run a business." That passion shows in every new model that has added another layer of history to the Vespa brand.

Most importantly, Vespa's financials back up the feel good story.

Vespa, at a Glance (First Quarter 2014)

Year-Over-Year Sales Growth

  • Europe: +6.3%
  • Italy: +8.3%
  • United States: +4.6% (market -10.7%)
  • India: +33%

Market Share

  • Europe: 25.4%
  • Italy: 30.6%
  • United States: 23.7%

-- By Brian Sozzi CEO of Belus Capital Advisors, analyst to TheStreet.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

At the time of publication, Sozzi held no position in the stocks mentioned.

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