The factory, in Vinh Phuc province near the capital Hanoi, will have a production capacity of 100,000 Vespa scooters by 2012, the company's president Roberto Colaninno said.

The communist country is a good production base for the region because it has 50 million people under 30 years of age, good industrial experience and a domestic scooter market that grows by two million every year, Colaninno said.

Piaggio hopes to ultimately export the Vietnamese-made scooters to elsewhere in Southeast Asia and even to the United States.