The $30 million plant will manufacture 125 and 150 cc Vespa scooters, said Roberto Colaninno, Piaggio Group's president.

"We consider Vietnam as an important market with high GDP growth, young generations and the number of scooters is one of the biggest in the world," he said.

Once it is fully in operation, the plant will employ about 350 workers. Each year it is expected to produce 100,000 scooters for the local market and for export to other countries in the region.

"We have exported made-in-Italy Piaggio, tomorrow we will export made-in-Vietnam Piaggio," Colaninno said.

Last year, some 17,000 Vespa scooters were sold in Vietnam.

With a population of 87 million, Vietnam has more than 20 million motorbikes, most of them were Honda and other Japanese brands, according to government figures.

Piaggio has sold imported Vespa scooters in Vietnam at a price of roughly $5,000. The locally made vehicle is expected to be $1,500 cheaper, it said.

Piaggio has also invested in China and India.

The Associated Press June 24, 2009