May 30 (Bloomberg) -- Piaggio & C. SpA, maker of the Vespa motor scooter, scaled back earnings targets to reflect a worsening economic outlook while forecasting that operations in Asia will sustain profitability through 2010.

Sales will rise 4.9 percent a year on average to reach 1.95 billion euros ($3.03 billion) in 2010, Pontedera, Italy-based Piaggio said in a three-year investment plan published today. Earnings before interest, taxes, depreciation and amortization will increase to 13.5 percent of revenue in 2010 from an estimated 13.2 percent this year.

The new targets ``are more consistent with the market outlook,'' Chief Executive Officer Roberto Colaninno said in a Bloomberg Television interview in Milan today. ``Our strong presence in Asia and the diversification of our procurement is having a positive impact.''

The scooter-maker had a previous revenue-growth target of about 7 percent under a business plan approved in April 2007. Ebitda was forecast to rise to about 14 percent of sales in 2009. The new targets are still higher than analysts' expectations. Analysts in a Bloomberg survey have estimated sales will decline to 1.66 billion euros this year and reach 1.8 billion euros in 2010, with an Ebitda margin of 13.3 percent.

Piaggio rose 3.3 euro cents, or 2.2 percent, to 1.55 euros in Milan trading, the highest since May 7. That pared the stock's decline this year to 33 percent, valuing the company at 613 million euros.

Production Shift

About two-thirds of Piaggio's revenue growth through 2010 will derive from Asia, led by India, the company said in a business-plan presentation distributed to analysts. The region will account for about a quarter of total sales in 2010.

``If we want to grow, we need to be there,'' Colaninno said. Piaggio, which is controlled by Colaninno's Immsi SpA holding company, is seeking to boost sales in emerging markets including India and plans to shift some production to Vietnam to reduce costs and dependence on the Italian market.

Piaggio said May 7 that first-quarter profit dropped 68 percent to 3.1 million euros as sales slumped 7.7 percent. The European scooter market will post an average annual decline of 2 percent, and the motorcycle market will shrink a yearly 1 percent, through 2010, the company said. Piaggio's revenue in Europe will be ``flat,'' Colaninno said. The region accounts for about four-fifths of Piaggio's sales.

The company is expanding into three-wheel and four-wheel commercial light vehicles and introducing more powerful scooters, including the new Vespa GTS 300, to meet increasing demand for larger bikes. Piaggio said today it's studying a hybrid-engine four-wheel vehicle and will present a hybrid version of the MP3 three-wheel scooter later this year.

To contact the reporter on this story: Marco Bertacche in Milan at mbertacche@bloomberg.net; Tommaso Ebhardt in Milan at tebhardt@bloomberg.net.

Last Updated: May 30, 2008 11:55 EDT