MILAN Feb 27 Annual profit at motorcycle maker Piaggio fell 9 percent after demand in its home Italian market slumped to an all-time low because of the economic crisis.
Piaggio, which was founded over a century ago and produces the iconic Vespa scooter, said European sales of two wheelers had fallen by 50 percent since 2007 as the effects of the downturn were felt across the continent.
Italians have always had a particular love of the scooter to get around their congested cities. Views of cities like Rome from a motorbike have featured in a number of films but the market in Italy is down by 55 percent over the past five years.
Piaggio said it had consolidated its position as leader in the shrinking European market, and confirmed it would continue with its 2011-2014 business plan "despite the persistent slowdown in global growth."
Weakness in Europe was partly offset by the United States, one of the few Western markets where motorcycle sales are increasing.
Group turnover also grew by double figures in the Asia Pacific region, as Piaggio launched the Vespa in India as part of its international expansion.
However, the company sounded a note of caution on the Asia Pacific region where it said an unexpected downtrend in demand accelerated towards the end of the year.
Piaggio also produces three-wheelers and other light commercial vehicles.
Net profit in 2012 dipped to 42.1 million euros ($55 million) from 46.3 million in the previous year, Piaggio said. Revenue fell to 1.40 billion euros from 1.51 billion euros in 2011.
Despite the lower profit, Piaggio raised its dividend to 9.2 cents per share, against 8.2 a year ago.
Shares in the company slipped 1.5 percent on the Italian market by 1345 GMT. Piaggio is controlled by Immsi, a holding company controlled by Italian businessman Roberto Colaninno. ($1 = 0.7649 euros) (Writing by Keith Weir; Editing by Jennifer Clark and Hans-Juergen Peters)