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Malaguti USA

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Breaking into the Market: The New School Entrepreneurs
By Vert James


In a time when gas prices are driving the masses back to the days of carpooling and public transit, a name like Vespa is reforming itself to mean more of a transportation alternative than a piece of nostalgia. Scooters are just beginning to receive major attention right now in the US and for more reasons than our tradition of stealing anything that is cool and European. With gas prices and traffic through the roof, the scooter market is set to explode.

Many Americans have already heard about Vespa coming back into the market with a new corporate feel and slick boutiques featuring classic models and cappuccino machines at every location. However, the hot topic in the scooter scene is the name Malaguti. Unless you are a fan of elite motor engine and body models, or a connoisseur of sought after Italian quality, you are probably unfamiliar with this brand of scooters. This will soon change.

Malaguti is Italy’s third largest scooter brand and was recently introduced into the US market by a group of young, energetic college grads from the University of Florida. Apparently, college got boring after the first two years and it only seemed logical to these real-world newborns to start a business. Today, their communal attitude and youthful spirit continue to drive Malaguti USA forward at a mind-blowing rate. The company’s focus is to stick to the young, growing scooter crowd and offer Italian Scooters at American prices. While Vespa’s new US models start at $3,000, the Malaguti’s average $2700. They have also embraced the traditional scooter crowd, ensuring an incredible amount of street credibility, something the young executives noticed that Vespa lost when it sued small Vespa shop owners last year for name infringement. “Sure we want to make a buck,” said Ian Kirby, a Malaguti USA marketing executive, “but we’ve seen not only the scooter market, but most all of America, turn into a pathetic corporate wasteland.

At Malaguti USA we’ve embraced the extremely simple idea that if everyone is happy, from my coworkers to our customers, then we can’t go wrong.” This philosophy seems to be carrying Kirby and the rest of Malaguti USA to the top of their game faster than they realize.

How Malaguti Arrived In the States

Growing up in Miami, Joel Martin recognized scooters, a vehicle analogous with a European lifestyle, as part of his everyday being. Helping father Froilan and grandfather Manuel run a small scooter outlet in Miami, Martin became a natural expert in motor scooters and the related business. In college, he was approached by Malaguti and was asked to do American market research for the Italian firm. His college career was already highlighted by marketing internships at companies like Coke and Sony and so it came naturally to him to try to find a market for the Italian scooters. After consideration and the following realization of the huge potential for an American scooter market, Martin asked his friends Chris Esposito and Ian Kirby for help in looking for marketing opportunities for scooters in the US. Immediately, Esposito, Kirby and Martin turned their small DJ entertainment company that they ran for extra cash into a PR firm for the Malaguti scooter empire. In January they launched the Malaguti USA brand and have been hard under pressure to keep up with demand since they started.

When questioned about the birth and development Malaguti USA, Esposito said, “Most of our friends left college regretting the fact that they didn’t drink enough beer. I left regretting that I didn’t turn my DJ business into a PR firm that handles international accounts earlier. I couldn’t have asked for a better situation—my hobby has turned into my career.” Kirby added, “Everyday, we wake up and know that we are making our living doing exactly what we want to do. California is whining about the energy crisis but we’re loving it. It’s funny, people didn’t think scooters would sell, but now that gas prices are up everyone wants an Italian scooter.”

Since Graduation they have been turning down jobs left and right. The trio has omitted positions at marketing firms and youth-oriented websites. “The temptation’s always there—job security, company cars—that sort of thing, but that’s submitting to the rat race. Where’s the adventure?” Joel Martin, president of Malaguti USA asked. He continued, “We’re actually pretty lucky that we haven’t hopped on any of the corporate opportunities that have been offered to us. All my friends who left for the dot com field are now looking for jobs; we followed our hearts and were doing okay. It’s not about money.”

While the classically trained businessman would most likely frown upon the Malaguti USA marketing and promotional strategy, many established marketing experts are highly impressed by the innovative approach the young firm uses to promote itself. Their first event was the Indiana Motorcycle show at the RCA dome in February. While companies like Yamaha and Harley Davidson had expensive and flashy setups, the Malaguti team knew they would need something more if they were to attract the attention they were looking for. Using industry connections, their booth included a light show and a constant live performance by DJ Factor E who recently went on the road with the MTV Campus Invasion Tour. The Malaguti booth received national rave reviews and was voted one of the best booths at the event.

Their second event soon followed in March with Playboy Magazine’s Spring Break on South Padre Island, Texas. Playboy Playmates paraded around the island for the entire week on the hottest new scooter brand around. Esposito, Kirby and Martin personally escorted the Playboy limousine wherever the Playmates went on the island. The event received international headlines in the motorcycle and scooter press, on top of being featured on Playboy.com.

Malaguti USA opened its US headquarters in Miami, Florida where Martin’s family scooter shop was located. Malaguti SpA has been so impressed by Martin’s work, it extended Martin’s contract and asked him to set up all of North America to receive the giant scooter brand. His first mission was to send out Kirby and Esposito to open up the West Coast offices. Before this could happen, the Malaguti events reached the ear of Playboy’s president Cindy Rakowitz who offered to take on the Malaguti cause. She hired Chris Esposito as her Event and Program Coordinator for a new Marketing, PR company called RakNRoll (www.RakNRoll.com) Thanks to the new PR firm Malaguti is now making a name for itself outside of the scooter crowd. “With RakNRoll’s help we will be able to develop the brand to the point where it’s at in Europe in a shorter time. People know that Italian scooters are the best there is in style and quality, and it’s up to us to show them there’s more out there than just Vespa,” commented Esposito.

The next large event featuring Malaguti will be the Ducati World Weekend in Nevada this October. Hundreds of thousands of motorcycle fans will flock to the Vegas racetrack from all over the world to participate in the event. Malaguti USA just reached an exclusive licensing deal and promotional agreement with Ducati North America to be its official scooter. Malaguti will also be launching a line of limited edition US Ducati replica scooters for collectors this fall, all of which will have high exposure at the World Weekend.

In the meantime, Esposito, Kirby and Martin continue to run Malaguti USA in their own particular manner. Said Kirby, “It’s not an issue of Malaguti adjusting to the business and consumer here; it’s an issue of us retraining the American market to embrace the product we have and the way we do business. And it couldn’t be going better.” With that Kirby had to excuse himself. He said that he was on his way to the beach to meet Esposito—in the middle of the business day. “That’s what we do. We run our business on the precept that if we’re happy ourselves then everyone else will be happy with us.” Martin emphasized this in a separate interview saying, “At Malaguti we like to think that if it’s not getting better, you’re not doing it right.” After a laugh he said, “Well, it’s getting better.”

Not bad for a few kids who three months ago were looking for change to order a pizza.

All pictures courtesy of Malaguti USA

A novelist and scooter enthusiast, Vert James’ one goal in life is to be credited with inventing the bumper sticker slogan: I’d Rather Be…

Italians invade U.S. – Scooters are back!

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By Jeffrey the Barak

In September 2000, in the United Kingdom, there was a nationwide fuel shortage. The roads fell silent as cars and trucks sat around with their engines in hibernation.

However, the British public were already used to gasoline which cost as much as wine, so thousands of them were able to continue upon their merry way astride their motor scooters. Every tree, parking meter and light pole in London seemed to have a scooter chained to it, and the lanes were abuzz with cute little designer items from not only Italy, but also Spain, Taiwan, China, Korea, France, Japan and India.

European Scooter Boys

European Scooter Boys

Motor scooters exist only in fiction for many Americans. Long distances, cheap fuel, and air pollution laws that preclude the use of two-stroke fuel mixtures have rendered them almost permanently into the history books. But now as the century begins in 2001, the scooters are back.

They never completely left. When the two-stroke ban kicked in, the cool scooters (the Vespas) went away and all that was left were the four-stroke, plastic Hondas and Yamahas. Short on style and rather un-cool, they didn’t sell in sufficient quantities to make their presence felt. The re-introduced Italian Vespa line up, however includes a 50cc two-stroke that actually passed the pollution test and is legal in California.

Thanks to Piaggio, the parent company of Vespa, Americans can again buy scooters that are cool and un-embarrassing to be seen upon. It’s a retro thing. The only stumbling block to a takeover of the streets is the difficulty of obtaining a motorcycle license. In the United Kingdom, a car license lets you ride a 50cc scooter. In the U.S. you have to go and take a test. And that’s a real hassle for Americans who are used to impulsively buying a vehicle such as a car, and legally driving it off the lot.
On the last Saturday of 2000, the-vu visited Vespa of California Inc., a brand new, beautifully designed showroom in Sherman Oaks (Los Angeles) and talked to helpful sales associate Eddie Alcazar, himself an owner of several scooters including a 1954 Model D Lambretta, a 1967 SX200 and an array of 1978-79 P200 Vespas. He’s owned Vespas from the 50s, 60s and 70s, and has ridden, restored and lived with scooters for eleven years. His first scooter was a light blue 1964 Vespa 90 which he bought at a garage sale for $40 in the late Eighties.


Eddie at Vespa of California

Regarding that two-stroke issue, Eddie explained that California Emission Laws banned the selling of new two-stroke vehicles in the early eighties, and since all the Vespas were two-strokes, Vespa withdrew from U.S. soil. Around 1997 the off-road bikes that burned two-stroke were also banned, outside of racing on a track.

In the new Vespa model line up, the ET4 has a 150cc four-stroke motor, and the ET2 has a 50cc two-stroke motor, which has been retrofitted for the American market to meet American emission standards. Today the scooter, tomorrow the leaf blower?

The two Vespa scooters look identical. Only the badges look different. They are displayed in a showroom that has some serious design behind it. Feeling more like a clothing store than a vehicle dealership, Vespa of California displays and sells Vespas in all colors, clothing, retro-helmets and bags, purses and accessories that would not look out of place on Rodeo Drive in Beverly Hills. The showroom has green glass displays that would look respectable in a museum of art and they make espresso and cappuccino for the customers.

2001 Vespa facia

The owner of the Vespa boutique has a collection of bubble-cars and micro-cars and there is a service facility behind the showroom. The new Vespas sell at just under $3,000 for the ET2 and just under $4,000 for the ET4.

In the corner of the showroom is a 1961 Vespa. How do the new Vespas compare to the old? Eddie explains that the main difference is the twist-and-go automatic transmission on the new scooters. While these are easier to ride, only the old models with the clutches allow you to pop a wheelie, and some riders miss that. Wheelie poppers now have to purchase motorcycles. The disk brakes on the new scooters make stopping a much more efficient enterprise, however, so riders can pop a stoppie.


1961 Vespa at home with the 2001 models
What about fuel economy? The 150cc ET4 gets around 55MPG on 92 octane and the 50cc ET2 gets around 80MPG on a mix of 92 octane and two-stroke oil. The frame and the body are stainless steel, not plastic. Steel frames give stability. Eddie says certain colors; such as light blue sell so fast they can’t keep them on the sales floor. He wouldn’t quote an actual figure, but apparently scooter starved Americans are attempting to make up for the temporary absence of scooters on the streets. These things are flying out the door and into the San Fernando Valley.
Outside of Harley Davidsons and Indians, the Vespas are set to become the most accessorized two-wheelers in the U.S. The boutique is full of desirable Vespa accessories. Most impressive are the rigid backpacks, which also provide protection for the spine in the event of an accident. As Eddie shows us the range of body contoured shoulder bags, Vespa mechanic Robert with logo emblazoned overalls emerges from the back of the store. He is not oily, but infuses the essence of racing team into the boutique.

As the photographs for this article are taken a teenage couple scoot onto the sidewalk outside on a seventies Vespa. They look like they’re right out of an Italian movie. Inside the store we meet Jim Cavanaugh and his wife Ronnie, who are looking to buy a pair of Vespas to ride around the Valley on. They are replacing two ugly old Honda 50s. Yesterday they looked at new Hondas and today they are buying two Vespas. It’s the quality and the general beauty that persuaded them. They are lingering over the decision of color. Two red ones or one red and one ivory?

Readers hold on to your wallets however. There are a few things you need to know before you decide to be a motor scooter rider. Firstly, are you prepared to abandon the freeway system and take surface streets everywhere? The 150cc Vespa is freeway legal, but do you really want to be at full throttle with a Ford Excursion as big as an elephant five feet from the back of your head on the interstate?

If you want to be safe on the freeways, you need a real motorcycle capable of 90MPH with a twist of the wrist. It’s the speed and acceleration that can save you in an emergency. Scooters are for surface streets. Designed originally for the narrow and ancient roads in Italian towns, they are safe and comfortable on the boulevards of America, zooming from one red light or stop sign to the next and weaving through the rush hour traffic. The only other safety consideration is wheel diameter. Motorcycles have bigger wheels that can take the occasional pothole without too much trauma, but you have to aim your small-wheeled Vespa for the smoother parts of the street to avoid any explosive losses of control.

We pose retro sales associate Amy for one last shot and then leave in our car, considering if we can get away with buying some Vespas for fun. If a million Brits can do it in their lousy weather, what are we Southern Californians waiting for?

More Vespa boutiques are planned in San Francisco, Miami, Chicago and Houston.

The Vespa web site is at: http://www.piaggiousa.com/