Backstory | When LML and Piaggio stormed the two wheeler market before parting company

For LML, which was in deep financial distress, the JV marked an opportunity to transition from its traditional fibre business which was bleeding to two-wheeler manufacturing at a time when the Indian market was opening up rapidly. Unfortunately given the timing, it was off to an inauspicious start with the country’s foreign exchange crisis and economic slowdown taking their toll on sales. But soon it gathered steam and following a capital infusion and launch of new models, the LML scooter created a strong presence in the market, becoming the second-largest scooter maker in the country. By October 1997, the partners felt confident enough to announce their decision to enter the motorcycle segment.

But the demise of Giovanni at the age of 33 from intestinal cancer, changed the circumstances and in June 1998 Piaggio wrote to Deepak Singhania informing him of a change in plans which would effectively lead to their pullout from the JV. Singhania in turn, countered that in the altered state he had the right to buy out Piaggio's stake in the JV.

Matters dragged on and exactly a year later, the company notified the stock exchanges that its joint venture partner Piaggio had given notice for termination of the agreement. The Italian company also announced plans to set up a wholly-owned subsidiary in India for producing its range of premium scooters and custom bikes. Singhania moved the court for his right to buy out Piaggio’s stake while the Italian company moved the Company Law Board seeking the removal of Deepak Singhania as managing director of LML Ltd on grounds of mismanagement.

Eventually, in November 1999, LML and the Piaggio group resolved their differences in an out-of-court settlement agreement, and the JV was terminated.

Subsequently, in 2002, LML did try to revive the business and launched a series of motorcycles including the Adreno and the Freedom 110cc Commuter, but none of them met with any success.