Italian two-wheeler manufacturer Piaggio is planning to build a plant next year in order to strengthen its position in the Indonesian market.

"Indonesia is a good country to make an investment because of its stable political situation that encourages foreign investment, healthy financial situation that protects investors, growing young population with increasing purchasing power and growing economy," Piaggio Group CEO Mr. Roberto Colaninno said in his remarks at the official launch of Piaggio Indonesia.

However, the company will examine the market's response this year to follow up on its plan to establish a plant in the country. Mr. Colaninno told attendees that Piaggio expected a sales of between 80,000 and 100,000 units before building a plant.

"Our decision to build the plant will be confirmed if the trends and the probabilities of reaching the quantity are possible," he said, adding that the national motorcycle market may reach 12 million units in three years.

Piaggio Indonesia managing director Mr. Sergio Mosca said the company would focus more on establishing a solid network development this year than reaching a sales target.

"Our target this year is to develop outlets because they are the key means to contact customers," he said. "In the last six months, we set up our subsidiary in Indonesia, expanded structural and personnel investments and set up a local warehouse for vehicles, spare parts and accessories in Cikarang."

He added that Piaggio aimed to open 45 outlets across the country this year and increase the number to 100 in 2012 and 170 in 2013. "Each of the outlets will provide sales, service and spare parts," he said.

Piaggio's Asian director, Mr. Constantino Sambuy, said the company was marketing two brands for the Indonesian market Vespa and Piaggio for different types of consumers. "We are marketing our Vespa for premium class female and male consumers of between 20 and 35 years old and our Piaggio for both premium and middle class female and male consumers of between 18 and 35 years old," he said.

For the Indonesian market, Piaggio is marketing Piaggio Zip 100cc for Rp 12.9 million (US$ 1,500), Piaggio Zip 100 cc graphics at Rp 13.4 million, Liberty 150 cc fuel injection at Rp 22.5 million, Vespa LX 125 cc at Rp 22.9 million and Vespa 150 cc fuel injection at Rp 24.9 million.

Mr. Sambuy said the company was confident it would win in the Indonesian market because it had the top technology, which was environmentally friendly, and different products than what was available on the market.

Piaggio entered the Indonesian market in the 1960s with the Vespa PX, available on the market until early 2000. The company decided to gradually diminish the Vespa PX from the market because it had yet to fulfil standardized emissions regulations, it said in a media statement.

For the last few years, Piaggio was present in the Indonesian market through imports from different countries. The company's plant in Vietnam, the first in Asia, has supplied the local market since 2009.

Mr. Sambuy said Piaggio would soon build a second plant in Vietnam with an investment of US$ 40 million.